If you receive Social Security benefits, you've undoubtedly had many queries about how it all works over the years.
The Social Security Administration processes a variety of monthly disbursements, including those for Social Security beneficiaries, Social Security Disability Insurance recipients, and Supplemental Security Income recipients. And if you receive multiple of these payments, it can become even more complicated.
To help you navigate the intricacies of Social Security, from what you need to know before you retire to when your money arrives, we've compiled this instruction sheet so you can remain abreast of the most recent information.
Social Security Payment Schedule
Knowing when your monthly payment will arrive is essential whether you are a new Social Security recipient or have been receiving benefits for decades.
According to CNET, your payment date is determined by your birthday and the date you began receiving benefits.
On Wednesday, the final August Social Security checks will be distributed to recipients whose birthdays occur between the 21st and the 31st of any given month. Everyone else should have already received their payments for this month. For Supplemental Security Income recipients, these payments were due on August 1.
If you haven't received a payment this week, keep in mind that the Social Security Administration distributes payments in multiple cycles throughout the month. We will assist you in determining when your Social Security payment is due and explain how your payment date is determined.
If you have just begun receiving Social Security benefits, discover the optimal time to begin receiving them and how to delay them for a larger payout in the future. Here is the August schedule (PDF) for receiving your Social Security and/or SSI payments:
The August 3 payment date for Social Security recipients who began receiving benefits before May 1997.
Social Security payments for individuals with birthdays between the first and tenth of each month are issued on August 9.
On August 16, Social Security payments for individuals with birthdays between the 11th and 20th of each month.
Social Security payments for individuals with birthdays between the 21st and 31st of any particular month are due on August 23.
The Social Security Administration sends out monthly payments on the second, third, and fourth Wednesdays. The day you receive your check is determined by your date of birth.
If your birthday falls between the 1st and 10th of the month, your payment will be issued on the second Wednesday of the following month.
If your birthday occurs between the 11th and 20th of the month, your payment will be issued on the third Wednesday of the following month.
If your birthday falls between the 21st and the 31st of the month, your payment will be issued on the fourth Wednesday of the following month.
Taxable Social Security Benefits
For many retirees, at least a portion of their Social Security benefits are subject to federal income tax. Depending on your post-retirement income, you may be required to pay federal income tax on up to 85 percent of your Social Security income.
What about state taxation, though? Will you pay federal tax on your Social Security benefits and state tax when you submit your return?
The brief answer is that it depends on your location. Some states impose taxes on Social Security income, while others do not. Here is a summary of the states that do not tax Social Security, those that do, and what to consider when evaluating your prospective tax situation after retirement.
In the majority of states, the outlook for retirees is positive. 39 states and the District of Columbia do not impose any tax on Social Security benefits. Depending on your income and other tax circumstances, you may still be required to pay tax on your Social Security income at the federal level, but in the vast majority of US states, Social Security benefits are tax-free.
According to USA Today, the 39 states (and D.C.) do not tax Social Security benefits:
Alabama
Alaska (no income tax at all)
Arizona
Arkansas
California
Colorado (as of 2023)
Delaware
Florida (no income tax at all)
Georgia
Hawaii
Idaho
Illinois
Iowa
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Nevada (no income tax at all)
New Hampshire (no income tax at all)
New Jersey
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
South Carolina
South Dakota (no income tax at all)
Tennessee (no income tax at all)
Texas (no income tax at all)
Virginia
West Virginia
Wisconsin
Washington (no income tax at all)
Washington, D.C.
Wyoming (no income tax at all)
Constant Social Security Rules
The Social Security program appears to be subject to constant change, particularly in recent years.
A new Social Security reform measure (HR-4583) recently introduced in the House of Representatives could include significant adjustments for next year. However, eight regulations should remain unchanged in 2024.
1. Receiving benefits prior to the full retirement age (FRA) decreases payments.
You can begin receiving Social Security benefits at age 62, rather than waiting until full retirement age (66 and 67). According to the Social Security Administration, doing so could reduce your benefit amount by up to 30 percent.
Up to 36 months prior to the normal retirement age, a benefit is reduced by 5/9 of one percent per month. After 36 months, the monthly benefit is reduced by 5/12 of one percent.
2. Obtaining income prior to FRA and filing for Social Security are subject to annual earnings limit.
According to the Social Security Administration, if you are under FRA in 2023 and claiming benefits, the annual earnings cap is $21,240. However, if you attain FRA in 2023, the earnings cap for the preceding months is $56,520.
If you earn more than this amount, the Social Security Administration will deduct $1 from your benefit payments for every $2 earned above the annual cap.
3. Survivor benefits replace surviving spouse benefits after death.
Your spouse's death replaces your spousal benefits with survivor benefits. Spousal benefits are limited at 50% of the worker's benefit, while survivor benefits are 100% of the deceased worker's benefit.
4. You can only earn delayed retirement credits on your own benefits.
Social Security retirement benefits increase by a certain percentage for each month past the complete retirement age that you delay claiming benefits. At age 70, delayed retirement allowances are no longer available.
5. Taxable are Social Security benefits
Numerous individuals pay federal income taxes on Social Security benefits. But, according to the Social Security Administration, this is only the case if you have substantial income in addition to your benefits, such as wages, interest, dividends, etc. If you file a federal tax return as an individual, file a joint return, or are married and file a separate tax return, you will only be taxed on 85% of your Social Security benefits.
6. To qualify for ex-spouse benefits, you must have been married for a minimum of ten years.
You are eligible for ex-spouse benefits if you are at least 62 years old, unmarried, and divorced from a Social Security retirement or disability beneficiary. To qualify, you and your ex-spouse must have been married for at least 10 years. You cannot collect benefits on your ex-record spouse's if you have since remarried unless your subsequent marriage ended in annulment, divorce, or death.
7. To receive a spouse's benefit, your own benefit must be greater.
You can claim benefits based on either your own or your spouse's employment history, but not both. You will only receive a spouse benefit if it exceeds your own. Spousal benefits are also limited to 50 percent of the beneficiary's benefit at FRA.
8. There is no reason to delay receiving benefits until age 70.
Waiting past age 70 will not increase your benefits, even if you continue to delay receiving them. If you are 70 and have not yet filed for Social Security benefits, the SSA advises you to do so immediately.
