At Kensington Park, Our Promise is to love and care for your family as we do our own. That commitment includes not only providing exceptional care but also equipping seniors, families, and caregivers with the knowledge they need to confidently navigate life’s important decisions, including those regarding understanding Social Security.
To help empower our community, we hosted Kensington Park’s Annual Spring Speaker Series, a special event featuring expert discussions on essential topics like Social Security.
Whether you’re preparing to claim Social Security for the first time or helping a loved one understand their benefits, this guide offers a helpful overview of how Social Security works, when to start claiming, and how to make informed choices that support financial well-being in your golden years.
What is Social Security?
Social Security is more than a paycheck—it’s peace of mind. For many Americans, it’s the foundation of financial security in retirement.
The Social Security program, created in 1935, supports retirees, individuals with disabilities, and surviving family members of deceased workers.
Understanding how it works can empower you to make smarter, more confident decisions.
How does Social Security work?
You earn Social Security credits when you work and pay payroll taxes. Most people need 40 credits—roughly 10 years of work—to qualify for retirement benefits.
The Social Security Administration then calculates your benefit based on your highest 35 years of earnings.
When to start claiming benefits: Timing matters
Choosing when to begin receiving benefits is a big decision.
Here’s how your choice can affect your monthly income.
Claiming at age 62
You can start collecting benefits at 62, but they’ll be reduced by up to 30%.
Early claiming can be a lifeline if you need the income now, but it can reduce your lifetime benefits if you live into your 80s or 90s.
Claiming at full retirement age
FRA depends on your birth year. For most people today, it’s between 66 and 67.
Claiming at FRA ensures you receive 100% of your earned benefit.
Delaying benefits until age 70
Your monthly payment increases by approximately 8% each year you delay past your full retirement age (FRA).
This strategy can significantly boost your total benefit if you live a long life.
Weighing the pros and cons: Claim social security or wait?
For many people, claiming Social Security at 62—the earliest possible age—is tempting.
You gain access to your benefits immediately, which can significantly help if you retire early, face health challenges, or need extra income. The most significant advantage here is immediate financial support.
However, there’s a downside. Claiming early permanently reduces your monthly benefit. You could receive up to 30% less per month than if you waited until your full retirement age.
That reduction lasts for life, which could impact your financial stability later, especially if you live into your 80s or 90s.
The benefit of waiting until full retirement or later
Waiting until your Full Retirement Age (FRA)—typically 66 or 67—means receiving your full, unreduced benefit.
For many, this option offers the best balance of timing and income. You’re not waiting too long, but you’re also not sacrificing a portion of what you’ve earned over a lifetime of work.
You can significantly increase your monthly benefit if you can delay even longer, up to age 70.
The Social Security Administration rewards you with an 8% increase each year you delay beyond the full retirement age (FRA).
This strategy can lead to significantly higher lifetime income, particularly if you expect to live a long and healthy life.
What can affect your Social Security benefits?
At Kensington Park Senior Living, we understand that navigating Social Security can feel overwhelming, but knowledge is empowering.
Several important factors can influence how much you or your loved one will receive in Social Security benefits.
Knowing these details can help you make the choices that best support your well-being and financial peace of mind.
- Lifetime earnings: Benefits are calculated from your 35 highest-earning years.
- When you claim: Early vs. delayed filing affects the monthly amount.
- Marital status: Spousal, survivor, or divorced spouse benefits may apply.
- Continued employment: If you work while claiming benefits before FRA, your benefits may be temporarily reduced if you exceed the earnings limit.
- Taxes on benefits: Depending on your total income, up to 85% of your benefits may be taxable.
What is the 5-year rule for Social Security?
When people ask, “What is the 5-year rule for Social Security?” They usually refer to Social Security Disability Insurance (SSDI).
Here’s how it works:
If you were receiving SSDI and your benefits stopped because you returned to work, you have a 5-year window to request expedited reinstatement if your condition worsens.
That means you won’t need to start a new application or go through the entire approval process again.
Instead, your previous medical records and case history can be used to restart your benefits quickly.
This rule encourages individuals with disabilities to consider returning to work without fear of permanently losing their safety net.
It’s a thoughtful policy recognizing many challenges in managing long-term health conditions.
If you become unable to work again due to the same or related disability, the system is there to support you, without unnecessary delays or red tape.
Spousal and survivor benefits: support beyond your own earnings
Social Security isn’t just about what you’ve earned—it’s also designed to protect and provide for the people who matter most in your life.
Whether you’re married, divorced, or widowed, there may be benefits available that reflect your family’s shared contributions and needs.
Spousal benefits
Married? You may be eligible for up to 50% of your spouse’s benefit—even if you’ve never worked. These benefits are also available to divorced spouses under certain conditions.
Survivor benefits
If a loved one passes away, surviving spouses, children, or even elderly parents may be eligible for monthly support. This benefit ensures that families are not left financially stranded during grief.
Social Security and taxes
Your Social Security may be partially taxable based on your “combined income”:
- If you’re single and earn between $25,000 and $34,000, up to 50% of your income is taxable.
- If you’re married and filing jointly, and earn over $44,000, up to 85% of your benefits may be taxed.
Most states do not tax Social Security benefits, but a few still do.
Consult your local tax authority or a trusted financial advisor for further information.
Take the first step toward confident retirement planning
Whether you’re nearing retirement age or supporting a loved one who is, understanding Social Security is one of the most important steps you can take to build a secure future. And you don’t have to figure it out alone.
Don’t hesitate to contact Kensington Park Senior Living; our team is here and happy to assist you in your care journey.