Knowing 15 Fundamental Social Security Terms Will Make Retirement Planning Easier

Navigating any government agency can be difficult, and Social Security is no different.

If you're heading into retirement or just trying to plan ahead, you should take some time to familiarize yourself with these common Social Security terms to understand your benefits and application process better.

This is the age at which you become eligible for full benefits. The age may vary depending on when you were born.

Currently, the full retirement age is 66 if you were born between 1943 and 1954. That age gradually increases for people born between 1955 and 1960.

The full retirement benefits are available for anyone born in 1960 or later at age 67.

When the costs of goods and services go up, you may see an increase in Social Security benefits payments. The adjustment is based on the inflation rate and the current cost of goods.

This adjustment is not automatic and must be voted on by Congress. In 2025, more than 72.5 million Americans will get a 2.5% boost in their payments.

The amount of money you earn each year gets recorded and translated into work credits. The credits you earn remain attached to your Social Security record even if you change jobs or are out of work. Your earnings impact the amount of Social Security benefits you qualify for.

When you apply for Social Security, you will receive an official notice about your benefits. This official letter explains the agency’s decision (approval or denial) and includes the amount you will receive each month if you are approved.

If you want the biggest payout from Social Security, delaying your withdrawal can earn you additional credits.

Social Security benefits increase by a certain percentage, based on your birthday, if you choose this option. This credit gets maxed out at age 70, even if you choose not to take your benefits.

When you’re eligible for retirement or disability benefits, your spouse also becomes available as long as they meet the requirements.

If he or she is:

• At least 62 years old
• Any age, caring for a child of the spouse under age 16 or disabled
• Any age, caring for a child of the spouse who is over age 16 and became disabled before age 22

Yes, it's true. Sometimes, your ex-spouse may qualify for your Social Security benefits. You and your ex must have been married for at least 10 years, and your ex-spouse must be 62 or older.

The ex-spouse must be unmarried, and they do not qualify for a higher benefit themselves.

When you die, your beneficiaries are entitled to compensation based on your earnings records. This may include your spouse, children, and even your ex-spouse.

Survivor payments start at 71.5% of your spouse’s benefit and can increase up to 100% the longer you wait to apply.

This may also include a special one-time lump sum death payment of $255 made to your spouse or minor children.

Age 62 is the soonest you can begin to withdraw from your Social Security benefits. If you decide to take benefits at early retirement age, you may be forfeiting higher monthly payments for the remainder of your life.

Once you start receiving Social Security benefits, you can receive a maximum amount of earnings during a calendar year.

If you exceed this threshold, your benefit amount may be reduced. If you are at full retirement age, the maximum earning amount for 2024 is $59,520.

If you’re approved for Social Security benefits, you may be entitled to monthly benefits for months before you applied. You must meet the requirements to be eligible for these additional benefits.

Wages are calculated using the cash value of all compensation paid to an employee for services rendered. Even payments other than cash are also considered wages unless the form of payment is specifically not covered under the Social Security Act.

Your protective filing date is the date you first contact the Social Security Administration about filing for SSI and SSDI benefits. This date may be used to establish your benefit date regardless of receiving your signed application or approval at a later date.

When you die, a one-time payment of $255 is paid to eligible beneficiaries, along with any monthly survivor benefits. This special amount is only available to widows, widowers or minor children.

FICA stands for "Federal Insurance Contributions Act." It’s a tax that is automatically withheld from your wages. These funds are used to finance Social Security and Medicare programs.

You only pay this from earned wages. FICA is not deducted from your Social Security benefits.

Social Security offers retirement benefits based on your work history throughout your life, and you may need to supplement your income.

Your benefits are often extended to your spouse and children, so it's worth your time to become familiar with your benefits and eligibility dates.

Understanding the specific department lingo can help you better navigate the Social Security Administration as you head into retirement.