Social Security Retirement Benefits

Social security retirement benefits replace a percentage of senior workers’ income, calculated according to their pre-retirement income and lifetime earnings. Learn more about the factors that affect social security retirement benefits for you and your spouse as part of planning for a financially-healthy retirement.

Types of Social Security Retirement Benefits:

  • Retirement Benefits

This benefit applies to any worker, regardless of their marital status.

  • Spousal Benefits

Social security retirement benefits for the spouse of a benefit recipient can be based on the spouse’s own earnings record or calculated at 50% of the primary beneficiary’s retirement benefit rate at full retirement age.

  • Survivor Benefits

A widow or widower can become eligible to receive either 100% of their deceased spouse’s retirement benefits or 100% of their own retirement benefits — whichever is greater.

  • Divorce Benefits

If you were married for 10 years or more and become divorced, you can claim social security retirement benefits based on your ex-spouse’s recorded earnings.

When Can You Start Receiving Social Security Retirement Benefits?

In the state of Texas, “full retirement age” ranges from 66 to 67 (depending on the year you were born) and represents the standard case when claiming social security retirement benefits. A lower rate applies if you apply before this age and an additional loading applies if you delay your benefit. Compare the options in the table below:

Age Effect on Social Security Benefit
Age 62 This is the minimum age to claim social security benefits. Payments are reduced by up to 25% compared to the full retirement benefit.
Age 66 to 67 “Full retirement age” is 66 years and 2 months for people born prior to 1955 and this age rises gradually to 67 years for those born in 1960 or later. Recipients collect the standard rate.
Age 70 This is the upper age limit for beginning to receive social security benefits. Delaying your benefits until age 70 gives you up to a 32% additional loading on your payments compared to full retirement age benefits.

How Is Tax Applied to Social Security Retirement Benefits?

Your social security retirement benefits remain tax-free as long as your combined income stays below $32,000 for married couples filing jointly. Your combined income is calculated in the following way:

Combined Income = Adjusted Gross Income + Nontaxable interest + 1/2 of Social Security Benefits

Here is a table comparing the taxation rate on social security retirement benefits for you and your spouse when filing jointly:

Combined Income Benefits Taxed
< $32,000 0%
$32,000 to $44,000 Up to 50%
> $44,000 Up to 85%

Making the Best Decisions About Your Social Security Retirement Benefits

Preparing for a financially-healthy future begins long before you reach full retirement age and is a highly individual process. The best way to maximize your lifetime benefits (and those of your spouse) is to obtain a Social Security earnings statement disclosing the benefits you should be eligible for at age 60 and pass this on to your ML&R Wealth Management advisor. We will then simulate potential scenarios and advise you on the best course to take.

If you have any further questions or want to discuss your retirement savings strategy with a professional wealth management advisor, please contact us to book your free initial consultation today.