15 Things You Probably Didn't Know About Social Security

Millions of seniors rely on Social Security to cover their living expenses. And chances are that you'll depend on those benefits during retirement, too. That's why it's important to boost your knowledge of the program. Here are some essential facts to be aware of if you weren't already.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

Social Security doesn't pay all seniors the same benefit. Rather, your benefit is specific to you, and it's based on your wages during your 35 most profitable years in the labor force. Chasing promotions and raises could be your ticket to a higher benefit once you retire.

ALSO READ: 3 Lesser-Known Tactics to Boost Your Social Security Benefits

You're entitled to your full Social Security benefit based on your wage history once you reach full retirement age. If you were born in 1960 or later, that age is 67. If you were born earlier, that age is 66 and a certain number of months. You don't have to claim benefits at full retirement age, but it's important that you know what that age is.

You can sign up for Social Security starting at age 62. Doing so will give you your benefits sooner, but they'll also be reduced in the process. In fact, if you file at 62 with a full retirement age of 67, you'll be looking at a permanent 30% reduction in your benefits.

For each year you hold off on claiming Social Security beyond full retirement age, your benefits will grow by 8%. You can't boost your benefits beyond the age of 70, so there's no sense in delaying your claim beyond then. But if your full retirement age is 67 and you file at 70, you'll score a permanent 24% boost to your Social Security income.

ALSO READ: 1 Social Security Move Absolutely Everyone Should Make Every Year

Some seniors claims benefits early and regret doing so afterward. Social Security will give you one chance in your lifetime to undo your filing and repay the money you received in benefits. If you go this route, you'll get an opportunity to sign up for benefits at a later age and score more money each month.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

You're allowed to work and receive money from Social Security at the same time. Once you reach full retirement age, you can earn any amount without it impacting your benefit payments. But if you file before full retirement age, earning too much could cause some of your benefits to be withheld.

If Social Security is your sole income source in retirement, you might avoid taxes on your benefits. But even moderate earners are often taxed on a portion of their Social Security payments. Plus, there are 13 states that impose taxes on benefits as well.

ALSO READ: 4 Ways to Score a Higher Social Security Check

Each year, Social Security benefits are subject to a cost-of-living adjustment, which is to help seniors retain their buying power in the face of inflation. The amount of that boost varies from year to year, and it's possible to have a year without any boost at all.

If you never worked but are or were married to someone who's entitled to benefits, you may be in line for a spousal benefit. Your spousal benefit will equal half of your current or former spouse's benefit. If you're married, you can't claim a spousal benefit until your spouse starts collecting Social Security first.

Social Security gets the bulk of its revenue from payroll taxes. You may not enjoy paying them, but those taxes serve the vital purpose of keeping this important program afloat.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

Each year, there's a wage cap that determines how much income workers pay Social Security taxes on. This year, that cap is set at $142,800, so once your earnings exceed that point, those taxes are off the table. That also means that wages beyond the annual cap don't count toward calculating your eventual retirement benefit.

ALSO READ: 3 Strategies for Maximizing Your Social Security Benefit on Any Income

If you've been an average earner, you can expect Social Security to replace about 40% of your income. But most seniors need about twice that much money to live comfortably, so it pays to save independently for retirement to avoid a cash crunch.

If you paid enough Social Security taxes during your career to qualify for benefits, it doesn't matter how much money you have at the time of your claim. You can have a multimillion-dollar nest egg and still be entitled to retirement benefits.

Social Security may need to implement universal benefit cuts once its cash reserves, known as trust funds, run out of money. That could happen within the next 15 years, so today's seniors may need to brace for a reduction in their monthly income, and future retirees may need to gear up for lower benefits than expected.

ALSO READ: Stop Guessing: Here's How to Exactly Maximize Your Social Security

While Social Security is facing some financial challenges, the good news is that it isn't running out of money completely. There's no reason to think you won't collect benefits during retirement. They just may not be as generous as you'd like.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

The more you know about Social Security, the better prepared you'll be for retirement. Keep reading up on how Social Security works, whether you're years away from ending your career or are on the cusp of making your workforce exit for good.

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