10 Social Security Questions You Should Ask in Your 40s

Social Security is an important piece of your retirement planning, but you don’t want to wait until you’re about to collect it to start thinking about it.

There are questions you should ask at every age to help you prepare and plan for your retirement. Regularly checking up on your retirement readiness is as important as your physical health if you want a successful retirement.

If you’re in your 40s now, here are some questions you should ask now to get the most out of Social Security when you start to collect it.

The first step in planning for retirement is to create an account on SSA.gov, regardless of your age.

Once you have your account, you can use the Social Security Administration’s estimator to figure out how much your monthly payment will be, depending on what age you start receiving benefits in the future.

The answer to this question depends on many factors. Are you married, and can one spouse claim early and the other wait until age 70, when they will get the highest benefit? What is your full retirement age? Do you plan to work until that age?

While you can claim benefits at age 62, that amount will be the lowest benefit you can get. Do you have enough other savings to claim benefits at 62?

When you’re in your 40s, you have time to contribute the maximum to your retirement accounts, invest in the stock market, and earn more money in the prime of your career. Figure all of these factors into your decision.

Your Social Security benefits are based on the “average indexed monthly earnings” for 35 years, and the SSA uses your highest wages to compute your benefit.

You may be a stay-at-home parent or working part-time in your 40s when you have kids, which will affect your benefits. This could be a good time for you to consider other ways to save money for retirement or take on a full-time job to increase your benefits.

If your goal is to start Social Security at age 70 and you want to stop working full-time before that age, you’ll have to determine how much money you need to live on during those non-Social Security years.

You need to consider your fixed costs like your mortgage, utilities, and other regular expenses, as well as one-time expenses such as travel. Have you saved enough to delay Social Security income?

Once you decide to start collecting Social Security benefits, the process is pretty simple. You can apply online, by phone (800-772-1213), or make an appointment at your local Social Security office.

It can take several weeks to process, but you may be able to get your paperwork completed within the same month that you applied. Your bigger decision will be at what age you want to collect rather than the time it takes to process your request.

If you start collecting Social Security and decide to return to work or realize you need more money, you can work but your income may affect your benefits, unless you are at full retirement age.

Collecting before your full retirement age means you can earn up to $22,320 in 2024. At that point, the SSA will deduct $1 from your benefit for every $2 you earn above that amount.

Once you reach full retirement age, you can earn as much as you want without decreasing your benefit.

Married retirees should consider two Social Security payouts instead of one and decide at what age each of you want to collect.

If you’re in your 40s, estimate each of your benefits at various ages to figure out who should collect first or if you should both wait until full retirement age or even 70.

One spouse delaying benefits until age 70 can make a big difference in the quality of your retirement.

Social Security should be part of your retirement income, with other money coming from investments or accounts like a 401(k), traditional or Roth IRA, or perhaps a pension.

When you’re in your 40s, it’s a good time to consult a financial advisor to determine the mix of personal investments and Social Security you may need for your retirement. 

In addition to investments, a financial advisor or estate attorney can help you plan for health care and draft important documents such as a will, power of attorney, and advanced health-care directive.

You may have a job that allows you to work remotely, or perhaps your career has taken you to another country, and that could be an issue when collecting Social Security.

If you are working for an American company abroad, you're probably paying U.S. taxes, including Social Security tax. If you're self-employed, you should pay Social Security taxes so that you have 10 years of payments or 40 credits to make you eligible for benefits.

The best advice for self-employed people living abroad is to consult with an accountant to ensure that they are paying the correct amount in Social Security taxes each year.

When you’re in your 40s, you are probably decades into your career and in your prime earning years. And based on statistics, you’ve probably already had more than one employer.

Changing jobs for a higher income or losing your job due to layoffs or other issues is common these days. As long as Social Security taxes are being withheld or you are paying them if you’re self-employed, the benefits will be there when you retire.

Social Security is an important piece to consider when you’re trying to find the best ways to build wealth after 40.

You may want to begin working with a financial planner at this age to help you develop a retirement plan. They can help you set savings goals, advise on how your investments should be allocated, and help you manage your current budget to meet your goals.

The goal is to prepare for retirement by using Social Security and investments to assure your third act will be as satisfying as your career has been.