Almost every American is impacted by Social Security in some way, so it’s no wonder that it’s one of the most frequently asked topics in retirement planning. When and how you start taking benefits is crucial to ensuring a stable stream of retirement income.

To address some of your most pressing Social Security questions, Nicholas J. Colantuono, CFP® joins Better Money Boston with WCVB Channel 5.

Can I Take Social Security While Working?

As long as you’re at least 62 years old, you can begin claiming Social Security benefits while still working. However, until you reach full retirement age, some of those benefits may be withheld. In 2024, if your total combined income exceeds $22,320, approximately $1 in benefits will be deducted for every $2 you earn above the limit. Planning the timing of your benefits is key to maximizing your total retirement income. By working with a financial advisor, you can devise a claiming strategy that supports your retirement goals.

Do I Have to Pay Taxes on Social Security Income?

The amount of taxes you may owe on your Social Security benefits depends on your other sources of income. If Social Security is your sole income source, it is unlikely you will owe any taxes. However, if you’re like many of our clients, that’s not the case – you likely have considerable income that can significantly impact your tax liability. Fortunately, there are ways to calculate and anticipate your future tax burden.

This calculation depends on your Modified Adjusted Gross Income (MAGI), which includes all income sources plus half of your Social Security benefit. The resulting amount will ultimately determine whether your benefits are taxable, and if so, what percentage is subject to federal and state income tax. Depending on your total combined income, up to 85% of your Social Security benefits may be taxable.

How Can I Draw from My Spouse’s Benefit?

Spousal benefits are one unique way to increase your household income. Benefits are based on your spouse’s work history and earnings, and to qualify, you must be or have been married for at least 10 years. Often, one spouse has a higher earnings record than the other – perhaps one stayed home while the other worked, or one had a lower income. Either way, once the higher-earning spouse claims their benefit at full retirement age, the lower-earning spouse can collect up to 50% of that benefit.

Social Security is a complex system with thousands of rules and regulations, but we don’t want you to feel discouraged. A financial professional can help guide you through the many factors to consider when creating a solid claiming strategy, including your life expectancy, financial situation, and marital status.