Social Security Numbers To Know
Maximizing your Social Security payments depends on the taxes you pay, your earnings history, the age you decide to take the benefits and the dependents you have. Here are some important Social Security rules to pay attention to:
* $1,294: This is the average Social Security payment for 2014. The average for retired couples is $2,111.
* 6.2 percent: Employees pay this percentage of their income into the Social Security system. Employers also pay the matching amount for a total of 12.4 percent per employee. If you are self-employed, you are responsible for paying the full 12.4 percent of your earnings.
* $117,000: This is the maximum taxable income cap for 2014. You will not pay Social Security taxes on income over this cap. Once you earn over the cap in a single year, you will see an increase in your paycheck since no Social Security taxes are taken out.
* $15,480: If you take Social Security benefits before the age of 66 and continue to work, you can earn this amount in 2014 before $1 in benefits will be temporarily withheld for every $2 you earn above this limit. In the year you turn 66, the limit increases to $41,400 and the withheld amount drops to $1 for every $3 you earn over the limit. After you turn 66, you can work and collect Social Security benefits at the same time without the penalty.
* 62: This is the age you can start taking Social Security benefits, but the amount is significantly reduced compared to waiting until full retirement age.
* 66: If you were born between 1943 and 1954, this age is when you can collect your full Social Security benefits. If you were born in 1955, the full retirement age is 66 and two months. It increases in two-month increments for every year until 66, and 10 months for those born in 1959.
* 67: This is the full retirement age for anyone born in 1960 or later.
* 70: Social Security benefits continue to increase if you delay taking it up until age 70. After 70, there is no additional benefit to waiting.
* $34,000: If your adjusted gross income, non-taxable interest, and half of your Social Security benefits total more than this amount ($44,000 for couples), then you will have to pay income taxes on up to 85 percent of your Social Security benefits. If your total income is between $25,000 and $34,000 ($32,000 and $44,000 for couples), then up to 50 percent of your Social Security benefits are taxable.
* $2,642: This is the maximum Social Security benefit anyone can receive in 2014. In order to receive this, however, you have to collect at full retirement age and earn at least the maximum income cap in each of the 35 years you put into the Social Security system.