Making Sense of Social Security: The Top Five Questions People Ask
By Ben Strother, PhD, BFG Financial Advisor
Social Security is not as complicated as it seems. However, with so many moving parts, it’s no surprise that people have questions.
Whether you are nearing retirement or just starting to think about it, the more you know about Social Security, the better decisions you can make about your future.
What is Social Security?
Social Security is a government-backed income stream designed to replace a portion of your working earnings in retirement. Your unique work history, age, and when you start taking payments determines your benefits.
Social Security also protects your spouse. Survivor benefits allow a widow or widower to receive their late spouse’s full benefit. If each of them received social security, the surviving spouse can retain the higher benefit.
Social security is not recommended as a sole retirement strategy, but it does serve as a reliable layer of income—replacing around 40% of an individual’s average lifetime income.
Here, we break down the top five most frequently asked questions about Social Security to help equip you for retirement.
1. Is Social Security Going Away?
No, Social Security isn’t disappearing. A common misconception is that Social Security is “running out of money.” While the Social Security trust fund is projected to face funding shortfalls in the future, this does not mean benefits will disappear.
Changes such as modifying benefit amounts or raising the full retirement age have been discussed, but Social Security remains a key source of retirement income for millions of Americans.
2. When Should I Start Taking Social Security?
The timing of when to claim Social Security benefits is an important decision. You can begin as early as age 62, but your benefits will be permanently reduced. Waiting until full retirement age—between 66 and 67, depending on your birth year—allows you to receive 100% of your benefit. If you delay until age 70, your monthly payout increases even further. Factors also include life expectancy and early retirement lifestyle.
3. Can I Work While Receiving Social Security?
Yes, but there are rules to consider. There is an earnings limit if you claim benefits before your full retirement age.
In 2025, if you are collecting early benefits and earn more than $23,400, Social Security will withhold $1 for every $2 you earn over that limit. However, once you reach full retirement age, you can work and earn as much as you want without reducing benefits.
This makes it possible to work while collecting Social Security and still receive the full benefit over time.
4. Will My Social Security Benefits Be Taxed?
Yes and no. It depends on your total income. Many retirees are surprised to learn that their Social Security benefits could be taxed, especially if they have other income sources such as pensions, investment withdrawals, or rental income. It’s a good idea to plan and consider strategies to minimize taxable income, such as drawing from tax-advantaged retirement accounts in a way that keeps your income below certain thresholds.
We can help you navigate these tax implications and maximize your retirement income.
5. How Much Will I Receive from Social Security?
The amount you receive from Social Security is based on your highest 35 years of earnings, your age when you begin collecting benefits, and cost-of-living adjustments. Generally, the longer you work and the later you claim benefits (up to age 70), the higher your monthly payout will be.
To estimate your future benefits, you can create an account on www.ssa.gov (https://www.ssa.gov) and review your personalized Social Security statement. This tool allows you to track your earnings history, see estimated benefit amounts at different claiming ages, and ensure your records are accurate. Keeping up to date on your Social Security statement can help you make informed decisions about your retirement strategy.
New Social Security Rules and Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)
Recent legislative changes have impacted how Social Security benefits are calculated for individuals who receive a pension from non-Social Security-covered employment. Historically, the Windfall Elimination Provision (WEP) reduced Social Security benefits for people who worked in jobs where they did not pay Social Security taxes—such as teachers or government employees—while also earning Social Security-covered wages elsewhere.
Similarly, the Government Pension Offset (GPO) reduced or eliminated spousal and survivor benefits for these individuals. New legislation has updated these provisions, particularly benefiting teachers and government workers. Many of these individuals will now receive more of their Social Security benefits than before, and some will no longer face reductions. This change provides a much-needed financial boost for retirees previously impacted by these provisions. If you have worked in both covered and non-covered employment, it is important to review your Social Security statement to understand how these changes may impact your benefits.
Benson Financial Group is not associated with the Social Security Administration or any other
government agency.
