Retirement in the US: 8 Social Security Rules Most People Misunderstand

A 2025 survey found that more than half of respondents don't know when it's best to start receiving pension payments, and about the same number aren't sure when they'll reach full retirement age. How to navigate the intricacies of pension payments is explained. Money Talks.

About 21% of married couples receiving Social Security benefits and about 45% of single recipients rely on those benefits for 90% or more.

Knowing the rules allows you to receive the maximum possible amount of monthly payments.

On the subject: Trump Proposes New Retirement Savings Plan: How It Will Work

Here are some key rules of the Social Security system.

1. Social benefits are intended to replace only part of the income

It's important to understand that Social Security payments were never intended to provide a person with full income. They are intended to replace only a portion of the income they earned before retirement.

According to the Social Security Administration, depending on your earnings during your working years, this share can range from 28% to 79% of your previous income.

However, there are retirees who live almost entirely on these payments. While this isn't ideal, it's possible in some cases.

2. The payment amount is calculated based on the 35 most profitable years.

The Social Security Administration calculates your monthly benefit using a formula based on your 35 highest-earning years—the years when you had the most income.

If you have less than 35 years of work experience, the missing years are counted as zero, which reduces the potential amount of benefits.

Therefore, if possible, it's worth working for at least 35 years. The more years of high income you include in your calculation, the higher your monthly pension will be.

It's a good idea to review your Social Security earnings history once a year to make sure all your income is being reported correctly.

3. Payments may be subject to tax.

Many people are surprised to learn that Social Security income is taxable. Approximately 40% of recipients pay federal taxes on these payments.

Up to 85% of the payments you receive may be considered taxable income by U.S. federal tax authorities.

Additionally, some states also tax Social Security payments.

4. You can start receiving payments from the age of 62.

For most people, the earliest age they can start receiving Social Security benefits is 62.

For those receiving survivor's benefits, the minimum age may be 60 years.

If you start receiving payments at age 62, this is considered early retirement, so the monthly amount will be smaller and will remain the same for life.

5. The full amount of the payment depends on the full retirement age.

Full Retirement Age (FRA) is the age at which a person is eligible to receive the full amount of their monthly benefit.

If you start receiving payments before this age, the amount will be reduced to approximately 30%.

If you delay receiving payments, the amount of payments will increase by approximately 8% for each year of waiting (up to 70 years).

For most people today, the full retirement age is between 66 and 67 years, depending on the year of birth.

6. A spouse's work history may also play a role.

Sometimes it is more advantageous to receive payments based on the work history of a spouse or former spouse if their income was higher than yours.

For example, if you have been unemployed for a long time, earned little, or were a housewife (or homemaker), you can receive up to half of your spouse's monthly payment.

If it's an ex-spouse, it usually requires that the marriage last at least 10 years and that you haven't remarried.

7. The time when you start receiving benefits usually does not affect the total amount over your lifetime.

If you start receiving payments earlier, the monthly amount decreases; if you start receiving payments later, it increases.

However, given the average life expectancy, the total amount of benefits paid over a lifetime is usually about the same.

The Social Security system was designed exactly this way—it's called actuarially neutral.

There's a significant upside to waiting: larger monthly payments can significantly improve your quality of life in old age.

8. Sometimes, survivor's benefits can be received even after remarriage.

Survivor payments (often called widows' or widowers' payments) allow the surviving spouse to receive up to 100% of the deceased spouse's payment.

Typically, you can apply for such payments from the age of 60, but if you do so before full retirement age, the amount will be reduced.

You may be interested in: top New York news, stories of our immigrants and helpful tips about life in the Big Apple - read it all on ForumDaily New York

Remarriage may affect eligibility for these benefits.

As the Social Security Administration explains, if you remarried before age 60 (or before age 50 if disabled), you cannot receive benefits for your deceased spouse.

If the marriage was concluded after 60 years (or after 50 years if you are disabled), this does not deprive you of the right to such payments.

From the age of 62, you will be entitled to receive payments based on the work history of your new spouse, if they turn out to be higher.

Read also on ForumDaily:

7 New Rules That Will Help You Get a Bigger Tax Refund

11 Medical Expenses Medicare Doesn't Cover

How much do you need to save each month to live comfortably in retirement in different states?

Do you want more important and interesting news about life in the USA and immigration to America? — support us donate! Also subscribe to our page Facebook. Select the “Priority in display” option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram  and Instagram- there is a lot of interesting things there. And join thousands of readers ForumDaily New York — there you will find a lot of interesting and positive information about life in the metropolis.