Q. Have there been any changes regarding Social Security Disability Insurance benefits and investing? Is it still not considered earned income?
A. There has been no change in the definition of earnings for recipients of Social Security Disability Insurance benefits. Earnings are income received from employment or self-employment. Profits on investments are not earnings for earnings limitation purposes or as a measure of whether or not a disabled individual has regained the ability to perform substantial gainful activity.
Q. I get $13,000 a year Social Security disability and have zero wages or income. I am a disabled vet that also gets 100% VA disability. The $13,000 Social Security is tax free, right?
A. You will pay tax on your Social Security benefits, based on Internal Revenue Service (IRS) rules. If you:
- File a federal tax return as an “individual” and your combined income is:
- Between $25,000 and $34,000, up to 50 percent of your benefits may be taxable.
- More than $34,000, up to 85 percent of your benefits may be taxable.
- File a joint return, and you and your spouse have a combined income that is
- Between $32,000 and $44,000, up to 50 percent of your benefits may be taxable.
- More than $44,000, up to 85 percent of your benefits may be taxable.
- Are married and file a separate tax return, you probably will pay taxes on your benefits.
Call the Internal Revenue Service at 1-800-829-3676 for a definitive answer to tax questions.
Q. My husband and I both worked full time for many years and individually will qualify for close to a maximum benefit. Will we each be able to do that, or is there a maximum payment to married persons that is less than the total they would receive if they were not married?
A. There is no maximum benefit for a married couple when both have participated in the workforce. In the situation you describe, each of you will receive his or her own benefit. In survivorship cases, the survivor receives whichever of their two benefits is greater.
Q. I have been of the belief that Social Security benefits are determined by taking the average income of all the years of employment. I recently heard that it is the average of the highest thirty-five years of employment. Which is correct?
A. Monthly Social Security benefits are determined on average monthly earnings over 35 years. When a benefit application is filed, the Social Security Administration indexes lifetime earnings to bring them up to date. The highest 35 years of earnings are selected and averaged to determine the monthly benefit. If a worker has more than 35 years of earnings, excess lower-earning years are disregarded. If the worker has fewer than 35 years of earnings, some zero income years are included in the calculation.
Q. About a year ago I purchased a new car. The Credit Union (after a credit check) asked, “Did you know someone else is using your Social Security number?” I called the local Social Security office and was told, “You will have to pursue this on your own. There are no laws on taking on someone else’s ID.” Can you possibly give me some advice on where to pursue this?
A. Depending on the extent to which your identity has been compromised, you may need the help of the Social Security Administration and the Federal Trade Commission. The Social Security Administration offers tips online on how you can protect your Social Security number (SSN) from identity theft and what to do if you believe someone is misusing your SSN. Go to https://blog.ssa.gov/protecting-your-social-security-number-from-identity-theft/.
More broadly, the National Committee is concerned about older Americans’ vulnerability to identity theft that stems from the use of the Social Security numbers (SSN) for purposes that are unrelated to the administration of the Social Security program. That’s why we have long advocated for the removal of SSNs from Medicare cards. Thankfully, legislation calling for this change was enacted in 2015 and is now law.
Q. I am eligible for benefits; my husband does not have enough credits. I know he will receive survivor benefits if I die, but does he receive any income if both are alive?
A. When you apply for your Social Security benefit to begin, your husband could become eligible for a Social Security spouse benefit if he is at least 62. At 65, he will be eligible for Medicare based on your Social Security earnings record. Upon your death, your husband will be eligible for a surviving spouse benefit (i.e., widower benefit). Whether a spouse or widower benefit is payable depends on your husband’s earned retirement benefits. If, for example, he receives a pension based on non-Social Security government employment, any spousal benefit he is otherwise entitled to receive will be reduced by two-thirds of his government pension. An issue brief discussing this provision of law can be found here.
Q. Our Social Security checks are deposited the 3rd of the month. Are they for the month of deposit, or the previous month?
A. Social Security benefits are always received in the month following the month for which they are due. For example, the benefit you will receive in February is for the month of January.
Q. Would you be kind enough to tell me the maximum monthly Social Security benefit one can receive?
A. The maximum benefit depends on the age you retire. For example, if you retire at full retirement age in 2023, your maximum benefit would be $3,627. However, if you retire at age 62 in 2023, your maximum benefit would be $2,572. If you retire at age 70 in 2023, your maximum benefit would be $4,555.
Q. I started taking Social Security in February of this year and now realize it may not have been the best decision. Once Social Security monthly benefits are started is there any way for me to change my mind and delay receiving benefits and if so what do I need to do to accomplish that?
A. Since it is less than a year since you began benefits, you are entitled to withdraw your original application for benefits. To exercise that option, you must repay the benefits received thus far. When you again want to receive benefits, you would submit a new application.
Q. My husband and I both worked full time for many years and individually will qualify for close to a maximum benefit. Will we each be able to do that, or is there a maximum payment to married persons that is less than the total they would receive if they were not married?
A. You have the right to specify the exact month you want your Social Security benefits to begin. Benefits begun before full retirement age are reduced for each month of early retirement. Benefits begun after full retirement age are increased for each month that a benefit is deferred. This has always been a retiree’s option.
Q. I called a local Social Security office yesterday to make an appointment for my wife and me to file for benefits. We have both reached full retirement age. The agent asked me when I wanted to start benefits. I didn’t know we had a choice. What answer should I give when we go to file?
A. There is no maximum benefit for a married couple when both have participated in the workforce. In the situation you describe each of you will receive his or her own benefit. In survivorship cases, the survivor receives whichever of their two benefits is greater.