Few government programs are as misunderstood as Social Security. Some of the confusion is understandable, considering the many moving parts within the program. However, Social Security is relatively straightforward at its roots as long as you understand its essential components and intent.

A Quick History of Social Security

During the Great Depression, the federal government sought ways to stimulate the economy and help the American workforce prepare for the future. The Social Security Act, signed into law in 1935, provided income to retired workers and met those goals.

Social Security Benefits

As a rule of thumb, the longer you wait to receive your benefits, the higher your benefits will be, and the greater your lifetime benefit will be. However, no matter when you elect to receive those benefits, you are considered fully covered if you have collectively worked for a minimum of 40 calendar quarters in a covered job or jobs.

If you are considered retired, the youngest age you can start receiving benefits is 62. You are eligible to receive maximum benefits if you elect to delay your benefits until 70. If you are married and your spouse accumulated their own Social Security benefits through work, they are entitled to the greater of their own benefits or an amount equal to half of your benefits.

Similarly, survivor benefits are available under certain circumstances for surviving spouses, children, and even ex-spouses.

Taxes on Your Benefits

Although the numbers are subject to change from year to year, taxation on your benefits can range from entirely tax-free to 85% of your benefits being taxed, in a worst-case scenario, according to your income tax bracket.

The IRS allows you to have a certain amount of income before your benefits become taxable. Once you reach that initial income threshold, 50% of your benefits will be taxed. If your taxable income surpasses both that initial income threshold and a secondary, higher one, 85% of your benefits are taxable. While not automatic, it is possible to withhold taxes on your benefits to ease the burden come April 15th.

Disability

Although increasingly difficult to qualify for, Social Security can provide early disability benefits if you are considered incapable of working due to a physical or mental diagnosis that is expected to last at least 12 months or ultimately result in death. Qualifying for Social Security disability benefits should never be assumed a given, however, as the Social Security Administration is exceptionally frugal with whom they grant disability benefits.

Have questions about how you should claim Social Security, want to run projections to maximize your benefit, or need help with your financial plan? We’re here to help! Simply click here or call (763) 445-2772 to schedule a complimentary consultation today!

This content was updated August 2026