What is Social Security?

A guide to help you navigate the application process with ease and understanding. 

Social Security was originally created to promote the economic security of retirees but has been expanded to offer financial aid to disabled workers and the families of deceased workers. 

When you retire, Social Security benefits are intended to replace a portion of your wages based on your lifetime earnings. The percentage of your previous income you can expect to receive from Social Security ranges from 27% to 75% based on:

  • The amount of your lifetime earnings (average over 35 highest paying years)

  • The year you were born

  • When you choose to start receiving benefits

  • Your marital status

Social Security Benefits
Range from 27-75% of your previous income.
They are based on
Average over 35 highest paying years of your lifetime earnings, Birth year, When you start receiving benefits and Marital status.

While Social Security is an essential piece of your retirement plan, it’s important to have other sources of income — private pensions, investments, savings or a part-time job — after retirement so you are able to live comfortably and enjoy this time of your life to the fullest. A financial advisor can help you create or update a retirement plan based on your unique situation and maximize your Social Security benefits. It’s never too early to start thinking about your future.

Social Security Offices in Utah

For a complete list of social security offices in your area, search these listings.

How Social Security Works

When you work, money is deducted from your paycheck and distributed to current Social Security beneficiaries; it is not held in a personal retirement account for you. Any unused funds are put into a trust for future distribution. 

The current withholding rate (2020) is 6.2% for the employee (up to a wage limit of $137,700); employers are required to match the employee withholding, for a total of 12.4%. Self-employed pay the entire 12.4%.

As you earn wages and pay taxes, you also earn Social Security credits. Based on your total annual wages, you can earn up to four credits per year. You usually need to work for 10 years to accumulate 40 credits and qualify for retirement benefits, but fewer credits are required to receive disability or survivor benefits. Your credit eligibility status is included on the second page of your annual Social Security Statement, which is mailed three months before your birthday. 

You can also access this information anytime by creating an online account at myaccount.socialsecurity.gov.

When to Apply for Social Security

You should apply for Social Security three months prior to when you want to receive retirement benefits. The exact timing varies — there is no one-size-fits-all approach to Social Security. Seniors are allowed to apply as early as age 62, but the full retirement age falls between 66 and 67 depending on your birth year. 

You may choose to retire sooner or later in life than others. This is a highly personal decision and significantly impacts your income. The longer you work, the more benefits you receive. Social Security benefits are based on an average of your 35 highest paying years; if you don’t work that long the years you didn’t earn anything bring your average down. Still, early retirement may be a better option in certain circumstances.


Before Full Retirement Age

If you apply for Social Security benefits prior to the age of 66 or 67, your monthly check will be smaller than if you wait until full retirement age. But you receive the benefits for a longer period of time. If you don’t have other income to pay basic expenses or have a terminal illness, it may be advantageous to apply for Social Security as soon as you are eligible. You could also choose to receive benefits early and invest them rather than spending them to maximize your money.

After Full Retirement Age

Until you reach the age of 70, every month you delay receiving benefits increases your monthly check by a certain percentage (determined by your year of birth) for the rest of your life. These increases are referred to as delayed retirement credits. You receive the benefits over a shorter period of time, however, by doing this. Delaying may make sense if you have other sources of income or you expect to live a long time after retirement.

Other Things to Consider

Your age isn’t the only thing to consider when deciding when to apply for retirement benefits from Social Security. If you’re currently receiving disability benefits or survivor benefits, it’s a good idea to speak with an advisor. Your retirement benefits may or may not yield more money than other benefits you’re currently receiving and the rules get complicated when multiple types of benefits are involved. It’s also important to consider your combined yearly income, tax filing status and corresponding tax thresholds.

Benefits Calculators

Before you apply, use this Retirement Calculator from the Social Security Administration to see how early and late retirement dates impact your monthly payments.

For the most precise estimate of all your benefits, download the Detailed Social Security Calculator. It includes retirement, disability and survivor benefits as well as possible reductions.

A full list of Social Security Benefits Calculators is available here.

Other Beneficiaries

In addition to the retirement benefits you receive from the Social Security Administration, immediate family members may also be entitled to payments. Your current spouse could be eligible if:

  • S/he is 62 or older

  • Is caring for your child who is younger than 16

  • Is caring for your disabled child

Your unmarried children may also receive benefits when you retire if they are:

  • Younger than 18

  • Ages 18 or 19 enrolled as full-time students in secondary school

  • Over the age of 18 with a severe disability that began before age 22

In certain situations, ex-spouse(s) may also be eligible for Social Security based on your previous earnings. This does not affect your monthly payments.

How Social Security Is Taxed

Approximately 60% of beneficiaries do not have to pay taxes on income from Social Security. If you file federal taxes as an individual and your total income is more than $25,000, however, you are required to pay taxes. Similarly, those who are married filing jointly have a threshold of $32,000 before they must pay taxes on Social Security Benefits.

How to Apply for Social Security 

When the day you’ve been dreaming of finally arrives and you’re ready to retire, the easiest way to file your application for benefits is to use the Social Security Administration’s online portal. It is a secure site that protects your personal information.You can also apply for spousal or disability benefits online, but not survivor benefits.

If you’d rather not use the online application use the Social Security Office Locator to find an office near you and schedule an appointment. 

Whether you apply online or in person, you’ll need original or certified copies of certain documents. Most will pertain to your own identity, but you may also need documentation for your spouse or children depending on the type of benefits you are applying for. Documents include:

  • Social Security card(s)

  • Birth certificate(s)

  • Proof of citizenship or lawful immigration if not born in the U.S.

  • Marriage certificate (if applicable)

  • Military discharge papers (if applicable)

  • Most recent tax return and/or W-2

If you don’t have all of these documents, the Social Security Administration can help you obtain the ones you need. 


Managing Social Security Online

Whether you’re ready to apply for Social Security or simply planning for the future, there are many advantages to creating an account at myaccount.socialsecurity.gov. This allows you to quickly and easily review your earnings history, see your latest statement and get personalized estimates of future benefits. If you’re wondering how to get a replacement Social Security card, this website is also the easiest way to do so. Beneficiaries can manage their payments by setting up or changing direct deposit. 

Additional Information

Still have questions? These videos are also full of helpful information: