Nearly every American worker includes Social Security benefits as part of their comprehensive retirement plan. As a member of the workforce, you pay Social Security taxes, which earn you “credits,” that go toward your Social Security benefits over time.
The amount of credit required to be eligible for retirement benefits depends on the year you were born. For example, according to the Social Security Administration, if you were born in 1929 or later, you need 40 credits (10 years of work). Once you earn the credits, they stay on your record even if you stop working and continue if you return to work. However, the government won’t pay any benefits until you earn the required credits that you accumulate over years of work.[i]
Key Points:
- How to decide when to start receiving Social Security retirement benefits.
- If you are eligible to receive Social Security benefits and wish to continue working.
- Addressing Social Security benefits that are taxable.
- Managing Social Security benefits that are subject to tax.
- Family members may be eligible for your Social Security benefits.
- Suggestions for applying for Social Security benefits.
- Could social security impact your pension from work?
- Social Security payments aren’t available in all countries.
- Benefits of the senior “bonus” or deduction.
- Other changes.
- Get the help you need from a financial professional.
Deciding when to start receiving Social Security retirement benefits
Deciding to receive Social Security benefits is a critical step in determining how much you will receive and how it may impact your retirement strategy and goals.
- Age 62: For people who are age 62 and are struggling financially, Social Security could be a very beneficial addition to their income. However, taking it before full retirement age (FRA), which is currently 67 years old for anyone born in 1960 or later, you can expect to receive 30% reduction in monthly benefits permanently and that lasts for the rest of your life.[ii] If you can’t work due to health problems, you may consider applying for Social Security disability benefits. The amount of disability benefit received is the same as full Social Security benefits, which are converted to retirement benefits once you reach FRA.
If you retire at age 62 in 2026, your benefit would be $2,969
- Age 67 (FRA): Age 67 is now considered full retirement age (for anyone born in 1960 or later). If you were born from 1943 to 1954, the full retirement age is 66. The full retirement age increases gradually if you were born from 1955 to 1960 until you reach 67. If you start receiving benefits at age 67, the percentage ranges from 28% for high earners, 42% for medium earners, and 78% for low earners.
If you retire at age 67 (Full retirement age) in 2026, your benefit would be $4,152
- Age 70: This is the optimal age to wait to take Social Security, if you can afford it. If you wait, your benefit will increase from the time you reach full retirement age, until you start to receive them. Doing so allows you to receive the largest monthly payment.
If you retire at age 70 in 2026, your benefit would be $5,181
Continuing to work and receiving benefits simultaneously
It is possible to continue working and still qualify for retirement benefits. Income in (or after) the month you reach full retirement age will not lower your Social Security benefits. That only happens if your earnings exceed the limits before you reach FRA. For example, if you are younger than FRA, $1 is deducted from benefits for every $2 earned above the annual limit. In the year you reach FRA, 1$ of your benefits gets reduced for every $3 earned over the annual limit. Upon reaching FRA, you can work without having any benefits reduced, regardless of how much you earn. Also, talk to your financial professional about eligibility for the “special monthly rule.”
Are Social Security benefits taxable?
Your Social Security may be taxable at the federal level; however, it depends on your income level whether or not you have to pay anything. If you have other sources of income, such as a part-time job or retirement income through a 401(k), you could pay some income taxes on your Social Security benefits. Also, Social Security is taxed at any age if your income exceeds the specified limit. You may have heard that Social Security is no longer taxed after 70 or some other age but it isn’t true.
To get an idea of whether you will owe any taxes on your Social Security benefits, take one-half of your benefits and add that to the amount of your other income. The technical term for this total is your “combined income.” It is calculated as follows:
- Nontaxable interest + adjusted gross income (AGI) + ½ of Social Security benefits = combined income.
If the combined income amount exceeds the limit set by the IRS, the “base amount,” you will have to pay a tax. For 2026, the base amount is $25,000 for single filers, heads of household, qualifying widows, or qualifying widowers with a dependent child. For joint filers, the base amount is $32,000.[iii] According to the IRS, those married and filing separately will likely have to pay taxes on their Social Security income.
One crucial detail to remember is that if you do have to pay taxes on your Social Security income, you will never have to pay more than 85% of your Social Security benefits, which depends on your tax bracket based on your filing status. So, for example:
- For single filers with a combined income between $25,000 and $34,000, you would have to pay taxes on up to 50% of your Social Security benefits. If your combined income is more than $34,000, you will pay taxes on up to 85% of the benefits.
- For married couples filing jointly, if their combined income is between $32,000 and $44,000, they will pay taxes of up to 50% of their Social Security benefits. If their combined income is over $44,000, they most likely would have to pay taxes on up to 85%.
- If you are married and file a separate return, you will most likely pay taxes on your benefits.
What happens if Social Security benefits are subject to tax?
Approximately 40 percent of people who receive Social Security are subject to tax on their benefits.
If 50 percent of your benefits are subject to tax, you would include the lesser of:
- 50 percent or,
- 50 percent of the amount by which your combined income (AGI + nontaxable interest + 50 percent of benefits) exceeds your income threshold, with higher thresholds potentially leading to 85 percent of benefits being taxable.[iv]
When it comes to more complex scenarios, such as 85% of your benefits being subject to tax, it's best to seek professional advice. Whether your benefits are partially or fully taxable, a financial professional can help you understand the potential impact on your financial situation.
Social Security benefits for family members
If you are eligible and receive Social Security retirement benefits, your family members might also qualify for benefits. Several fitting these criteria include:
- Spouses age 62 or older.
- Unmarried children aged 18 in school or older with a disability that began before age 22.
- Spouses younger than 62, if they care for a child entitled on your record younger than age 16 or has a qualifying disability.
- Benefits for a divorced spouse.
The Social Security benefits for family members section can be fairly complex and detailed, and a financial professional could help you determine which criteria apply to you and your retirement strategy.
What to do when you are eligible for Social Security benefits
When you are of age, you can apply for retirement benefits:
- Online at ssa.gov,
- By calling a toll-free number, or
- Contacting a local Social Security office.
Pensions from work
In 2026, paying Social Security taxes on your earnings will increase your benefits if you’re still working, however, pension payments from jobs not paying Social Security (such as foreign or government jobs) don’t count as earnings and generally won’t impact your benefits.[v]
Interested in traveling to or living in a foreign country?
Regarding most foreign countries, a U.S. citizen can travel to or relocate without having their Social Security benefits impacted. However, there are several countries where Social Security payments cannot be sent. If you work abroad, different rules apply.[vi]
Senior Deduction
In 2026, senior citizens, ages 65 and over, may be eligible for a new temporary senior “bonus” or deduction of up to $6,000 for singles, or $12,000 for married couples filing jointly. This new deduction, also called “No Tax on Social Security, was established to potentially eliminate taxes on Social Security benefits. The deduction is in effect from tax years 2025 – 2028. It can apply to taxpayers 65 and over, whether you take the standard deduction or itemize your tax return. And it is available to all eligible seniors, even if you don’t have social security income.[vii]
Other Changes
- Cost of Living (COLA) increase
The Social Security Administration announced a 2.8 percent COLA for 2026, increasing the average payout for retirees by $56 each month, or from $2,015 to $2,071.[viii]
- Medicare participants
Most Medicare enrollees pay a standard rate, typically as a deduction from their Social Security payments, so the premium increase has the effect of partially offsetting the COLA, by $17.90 per month.[ix]
- Work income threshold
The tax rate didn’t change, however, the amount of income subject to it is modified annually to reflect national wage trends. You will have to pay tax on work income up to $184,500 in 2026 (up from $176,100 in 2025). Earnings exceeding that threshold are not taxed for the purpose of funding Social Security.[x]
Consider consulting a financial professional
Consider consulting a financial professional before applying for your Social Security retirement benefits. Social Security is complex, and the content is modified annually. A financial professional can discuss with you the benefits of when to take your benefits, which aspects of Social Security impact you and your retirement goals, and how to understand the financial language and concepts based on your real-life scenarios. A financial professional may also be able to help mitigate unforeseen risks or challenges that could be faced by making a poor decision with long-term implications that weren’t initially on your radar. Take the time to schedule that appointment for you and your family to meet with a financial professional today.
Important Disclosures:
Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by LPL Marketing Solutions.
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Sources:
[ii]At what age should I start receiving my Social Security retirement benefits? | Frequently Asked Questions | SSA
[iii]Publication 915 (2025), Social Security and Equivalent Railroad Retirement Benefits | Internal Revenue Service
[iv]Is Social Security Taxed? Changes for 2026 Could Impact Your Benefits
[v]What happens if I work and get Social Security retirement benefits? | Frequently Asked Questions | SSA
[vi]Getting Social Security benefits if you are living outside the U.S. | USAGov
[vii]One, Big, Beautiful Bill Act: Tax deductions for working Americans and seniors | Internal Revenue Service
[viii]2026 Cost-of-Living Adjustment (COLA) Fact Sheet | News | SSA
