What You Should Know About Claiming Social Security Benefits

Claiming your Social Security payments is a retirement milestone. But not everyone receives their Social Security check on the same date. Benefits are paid out on Wednesdays, and those with a date of birth early in the month receive Social Security payments before those who were born later in the month. Understanding the timing of your Social Security direct deposits can help you manage your retirement finances. Here is a breakdown of when to expect Social Security checks, how benefits are paid and guidelines about when to apply.

How do you apply for Social Security?

You can apply for Social Security online at ssa.gov, by calling 1-800-772-1213 or in person at your local Social Security office. You must be at least 61 years and 9 months old to submit an application for retirement or spousal benefits, and payments can start as early as age 62. Your age when you enroll plays a big role in determining your payment amount, so take care to see how much you will receive at various claiming ages.

How much Social Security will I get?

 You can get a personalized estimate of your future Social Security benefit by creating a My Social Security account at ssa.gov/myaccount and viewing your Social Security statement. Your statement lists how much you are likely to receive in retirement if you continue working at your current salary until your full retirement age, age 62 and age 70. "If you look at your Social Security statement today, your estimated benefit is based on your previous year's income," says Ross Menke, a certified financial planner and founder of Lyndale Financial in Nashville, Tennessee. "If you do stop working earlier, that will have an impact on what you would be eligible to receive as a Social Security benefit." The statement also lists how much you will qualify for if you become disabled and what family members might receive if you pass away. Social Security statements are mailed to workers age 60 and older who don't have a My Social Security account.

[Read: 6 Social Security Calculators That Can Help You Decide When to Claim.] 

What is the Social Security tax limit?

 Most workers pay 6.2 percent of their earnings into the Social Security system and employers match this amount. Self-employed workers contribute 12.4 percent of their paychecks. However, earnings that exceed $128,400 in 2018 are not taxed by Social Security or used to calculate retirement payments. Workers who earn more than $128,400 will see a bump in their paycheck when Social Security taxes stop being withheld.

Your Social Security payments might also be taxed in retirement. If the sum of your adjusted gross income, nontaxable interest and half of your Social Security benefit exceeds $25,000 ($32,000 for couples), federal income tax could be due on part of your Social Security benefit. If these income sources exceed $34,000 ($44,000 for couples), up to 85 percent of your Social Security payments may be taxable. There are also several states that tax Social Security benefits.

What is the Social Security wage limit?

 You can work and collect Social Security benefits at the same time. However, if you are younger than your full retirement age, part or all of your Social Security payments could be temporarily withheld. Social Security beneficiaries who are younger than their full retirement age can earn up to $17,040 in 2018 before they will lose one benefit dollar for each $2 earned above the limit. The earnings limit jumps to $45,360 for those who turn their full retirement age in 2018, and the penalty decreases to one dollar withheld for every $3 earned above the limit. However, once you turn your full retirement age your benefit will be recalculated to give you credit for your withheld benefit and continued earnings. You can earn any amount without being subject to Social Security withholding after you turn your full retirement age.

What is the average Social Security benefit?

 Social Security payments to retired workers averaged $1,410 per month in March 2018. The average spousal payment is about half that amount, or $735. Widows and widowers receive survivor's payments worth an average of $1,342 monthly.

What is the maximum Social Security benefit?

The maximum possible Social Security benefit changes depending on the age you retire. A worker who retires at full retirement age in 2018 could be eligible for up to $2,788 per month. The maximum benefit at age 62 drops to $2,158, while someone who delays retirement until age 70 in 2018 could get as much as $3,698 monthly. In order to qualify for these large payments you need to maintain a high income throughout a career of 35 years or more. "Those who receive the maximum benefit possible are those who've earned at or above the highest taxable wage base all of the years that are used in the benefit calculation," says William Meyer, founder and managing principal of Social Security Solutions, a company that analyzes Social Security claiming strategies. "That person would have exceeded the maximum taxable earnings in each of the highest 35 years."

How do I get a new Social Security card?

Many U.S. citizens with a driver's license or state-issued identification card can use their My Social Security account to apply for a replacement Social Security card online. You can also fill out a paper application and mail it in or take it to your local Social Security office.

How do I qualify for Social Security disability? 

 If you have a medical condition that significantly limits your ability to work and perform basic activities such as walking or remembering, you might qualify for Social Security disability payments. Be prepared to provide medical records documenting your condition and why it prevents you from working. Social Security disability payments won't start until six months after your disability began. There's also a several month wait time to process disability applications.

[Read: The Social Security Retirement Age Increases in 2018.]

When will I receive my Social Security check?

Social Security beneficiaries are required to sign up for electronic payments. Social Security benefits can be directly deposited into a bank or credit union account or loaded onto a prepaid debit card. The payment dates vary based on your date of birth. If your birthday falls on or before the tenth of the month, you will receive your payment on the second Wednesday of each month. Those born between the 11th and 20th get their payments on the third Wednesday, and people born late in the month get their direct deposits on the fourth Wednesday.

When Social Security Is Paid

Social Security checks are normally paid on the second, third and fourth Wednesdays of each month. “The exact arrival date for Social Security checks depends on the recipient’s day of birth,” says William Lipovsky, CEO of First Quarter Finance in Lincoln, Nebraska.

If you were born:

• On the 1st through the 10th: Expect a check to be paid on the second Wednesday of the month.
• On the 11th through the 20th: Expect a check to be paid on the third Wednesday of the month.
• On the 21st through the 31st: Expect a check to be paid on the fourth Wednesday of the month.

There is a slight change for holidays. “If the payment date falls on a public holiday, the payment will instead be made on the Tuesday just before the originally scheduled date,” Lipovsky says. You can view the schedule for payments during 2019 at ssa.gov.

How Social Security Checks Are Paid

Beginning on March 1, 2013, Social Security checks are no longer mailed. You can receive your payment through two ways:

Direct deposit. You can choose to have the Social Security check deposited directly into your bank or credit union account.

Direct Express debit card. You can have the Social Security check loaded onto a debit card through the Direct Express card program. You don’t need a bank account for this setup. The card works for making purchases, paying bills or getting cash. However, there may be fees associated with some transactions.

What Time Frame the Amount Covers

Social Security benefits are sent out the month after they are due. “Social Security checks are paid in arrears, so any check received is for the month prior,” says Adam Beaty, a financial planner at Bullogic Wealth Management in Pearland, Texas. For example, your July payment is distributed in August.

Once you start receiving benefits, you might notice that at the beginning of the year your payment amount is different. The Social Security Administration adjusts payments each year to keep pace with inflation. As prices in the U.S. fluctuate, the benefits you receive could change to help cover the rising costs. The annual cost-of-living adjustment is calculated each October and paid out beginning in January.

When Social Security Payments Will Start

Some of the decision regarding when to start Social Security payments is up to you, but your payments could change depending on the age you sign up. “Currently, the earliest you can start taking Social Security retirement benefits is at age 62,” says Logan Allec, a certified public accountant and founder of Money Done Right in Santa Clarita, California. However, if you choose to start payments at age 62, you will receive a reduced benefit.

To receive your full benefit, you’ll need to wait until you reach full retirement age. Your full retirement age depends on when you were born. If you were born between 1943 and 1954, for instance, your full retirement age is 66. If you were born in 1960 or later, your full retirement age is 67.

Whether you should take Social Security benefits early will depend on your situation. If you need to stop working earlier than your full retirement age due to health reasons, you might decide to start taking Social Security to help cover your bills. However, if you have a large amount set aside for retirement, you could choose to draw from those funds and wait until your full retirement age or up until age 70 to start Social Security payments. “This is why it’s essential that you budget for different scenarios,” Allec says. You can sit down with a financial advisor to look at your current plan and create backup strategies.

How to Start Your Benefit

To begin receiving Social Security, you’ll need to fill out an application. You can apply for Social Security online at ssa.gov or make an appointment at your local Social Security office. To avoid any surprises, it’s best to start this process early. “Don’t do it at the last minute,” says Tim Sullivan, a national Social Security advisor and owner of Strategic Wealth Advisors Group in Shelby Township, Michigan. You might begin the process three or four months before you want to start receiving checks. This will give you enough time to make sure you have all the right forms and aren’t missing out on any potential benefits.

Don’t Overlook Taxes

Depending on your financial situation, you may have to pay taxes on your Social Security benefit in retirement. “Many soon-to-be retirees assume that Social Security benefits are not taxable since, after all, they already paid taxes on the income they contributed to Social Security over their working years,” Allec says. “Unfortunately, that is not how the system works, and the method for determining the taxability of your Social Security benefits is not so simple.” Retirees who owe taxes on their Social Security benefit need to make quarterly estimated tax payments to the IRS or have federal taxes withheld from their payments.

If you plan to continue working in retirement or aren’t sure how taxes will work, it might be helpful to sit down with a Social Security advisor before retiring. You can go over your expected taxable income during the coming years, and then determine the right time to start taking Social Security payments in retirement. Research the Social Security process now to avoid any surprises in retirement.

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Documents needed to apply for Social Security.