Social Security serves as a key income source for millions of retirees. And chances are, it's an important income source for you -- or it will be one day. That's why it's so important to understand exactly how Social Security works.
Now as you might imagine, there are a lot of rules attached to Social Security. And familiarizing yourself with all of them may be a daunting task. But here are three Social Security rules in particular it pays to know as the new year approaches.
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1. Filing for spousal benefits
Generally speaking, you earn the right to collect Social Security in retirement by working and paying taxes on your wages. If you accumulate 40 work credits in your lifetime, at a maximum of four per year, you can file for Social Security once you turn 62.
You might assume that if you never worked, you won't be able to collect Social Security. But if you're married to someone who's eligible for benefits, you may be in luck. That's because Social Security pays spousal benefits to people whose current or former spouses are eligible for those monthly checks.
It's important to understand the rules around claiming spousal benefits if you're in line for them. Here's an overview:
- If you're married, you can't claim spousal benefits until your spouse signs up for Social Security.
- If you're divorced, you generally don't need to wait for your ex-spouse to claim benefits before getting them yourself.
- You can sign up for spousal benefits starting at age 62, but they'll be reduced if you don't wait until your full retirement age.
- If you're entitled to your own Social Security benefit based on an income history and a spousal benefit, you can only collect one at a time.
Knowing this should help you prepare to file for spousal benefits when the time comes -- whether that's in 2026 or a later year.
2. Delaying your claim
You're entitled to your monthly Social Security benefits without a reduction once you reach full retirement age. If you were born in 1960 or later, that age is 67.
You can delay your Social Security filing past full retirement age for boosted benefits. But that incentive runs out once you turn 70, so there's no sense in holding off beyond that point.
Each year you wait on Social Security past full retirement age boosts your benefits by 8% for life. However, this incentive only applies to benefits you're claiming on your own earnings record. If you're claiming spousal benefits, there's no sense in delaying them past full retirement age, since they won't increase beyond that point.
3. Working while collecting benefits
Working as a retiree could be a great way to keep busy and boost your income. You're allowed to have a job while collecting Social Security. And once you reach full retirement age, you can earn as much money as you want without the risk of having benefits withheld.
If you're working while on Social Security before reaching full retirement age, you'll be subject to an earnings test whose limits tend to rise annually in line with inflation. In 2026, here's how that works:
- If you won't be reaching full retirement age, you'll have $1 in Social Security withheld per $2 of earnings above $24,480.
- If you'll be reaching full retirement age, you'll have $1 in Social Security withheld per $3 of earnings above $65,160.
Withheld benefits under Social Security's earnings test are not lost forever. Once you reach full retirement, your monthly payments are recalculated and boosted to account for the money that was withheld earlier.
It's not easy to keep track of Social Security's numerous rules. But these three could end up having a big impact on you, so it's important to understand the ins and outs.
