Social Security FAQs - Adviser Investments

Social Security FAQs

November 27, 2020

Social Security is a complex topic. While you may understand the basics (like when to file and what family benefits you’re entitled to), you might still be left wondering how to claim benefits, manage taxes associated with Social Security, and more. At Adviser Investments, we field Social Security questions from clients daily. Here are some of those most frequently asked along with our answers.

  1. How do I file for Social Security? You can apply online, via phone at (800) 772-1213 or at the nearest Social Security office. If you prefer an in-person meeting, make an appointment beforehand to save time and frustration.
  2. Do I have to pay taxes on my Social Security benefits? Generally, yes—but at a reduced rate. If your total income is between $25,000 and $34,000 (or $32,000 to $44,000 for a married couple filing jointly) then up to 50% of the benefits you receive from Social Security are taxable. If your total income falls below those levels, you do not pay taxes on your Social Security income. And if you are fortunate enough to surpass those thresholds, then 85% of your benefits are taxable. Note that this only applies to federal taxes—13 states apply their own taxes to Social Security benefits.
  3. Does work overseas count toward my Social Security? In many cases, yes. More than two dozen countries (including the U.K., Australia and Japan) have agreements with the U.S. allowing you to accrue Social Security credits for your time working abroad. Additionally, these agreements prevent you from facing a potentially nasty double-taxation situation.
  4. What are Supplemental Security Income (SSI) benefits and do I qualify for them? SSI is a separate program administered by the Social Security Administration that aids adults with disabilities and children with little to no income or assets. To qualify, you must be disabled, blind or at least 65 with limited (as determined by several different means tests) income and resources.If you or a loved one may be eligible for SSI, we often recommend setting up a special needs trust to set funds aside for them. These trusts are exempt from certain means tests and can allow the beneficiary to still receive federal aid like SSI.

Social Security is a significant source of retirement income for many Americans, and the rules governing it are confusing. We’re proud to say that we have some terrific expertise on the subject and are happy to share it. If you have questions about your specific situation, please contact us to receive a personalized breakdown.

This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed.

Our statements and opinions are subject to change without notice and should be considered only as part of a diversified portfolio. You may request a free copy of the firm’s Form ADV Part 2, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged.

Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional or licensed insurance professional regarding your specific legal or tax situation, or insurance needs.

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