Social Security benefits are monthly payments from the federal government that provide steady income to people who have retired, are living with disabilities, or are surviving family members of someone who has passed away. For many, these payments are a key source of support. They help cover essentials like housing, food, and healthcare during retirement or times of need.
Below, we’ll walk you through all the basics and beyond:
Social Security is a government program that provides monthly payments to people who qualify, such as retirees, people with disabilities, etc. It’s funded through payroll taxes– money taken out of your paycheck every pay period.
To qualify, you earn “credits” by working and paying into the system. Most people need 40 credits, which equals roughly 10 years of work. The amount you receive depends on how much you earned over your working life. The more you earn and pay in taxes, the more you can receive later, up to the maximum limits available.
There are four main types of Social Security benefits. Each is designed to help different groups of people depending on their situation. Here’s a look at each one:
Retirement Benefits
These benefits are for people who have worked or paid into Social Security over the years. You can start collecting as early as age 62. However, waiting until your full retirement age, usually between 66 and 67, means you’ll earn a bigger check. If you wait until 70, your monthly payments will be even higher.
Disability Benefits (SSDI)
If you become disabled and can’t work, you may qualify for Social Security Disability Insurance, or SSDI. These benefits differ from other disability programs because you must have worked and paid Social Security taxes before becoming disabled. SSDI is not the same as SSI or general assistance programs.
Survivor Benefits
If someone who worked and contributed to Social Security passes away, their family members, such as a spouse, child, or dependent parent, could receive monthly payments. The amount depends on the worker’s earnings and the survivor's relationship to that person.
Supplemental Security Income (SSI)
SSI is different from SSDI. It’s a separate program for people who have limited income and resources, regardless of whether they’ve worked in the past. It’s often used by seniors or people with disabilities who don’t qualify for SSDI. SSI is funded by general tax revenue, not payroll taxes.
The amount you get from Social Security depends on how much you earned during your working years and when you decide to start collecting benefits. The government looks at your highest 35 years of earnings to determine your monthly payment.
You'll likely receive more if you made more money over time and waited until your full retirement age. For 2025, the average benefit is around $1,900. The maximum is over $4,800 for those who wait until age 70. There’s also a minimum benefit for people who worked for many years at lower wages.
Your payment will differ from someone else’s, so check your estimate through your Social Security account.
You may have to pay taxes on your Social Security benefits depending on your income. At the federal level, if you have other income, such as wages, interest, or withdrawals from retirement accounts, up to 85% of your benefits may be taxable.
Every year, the IRS sets income thresholds to determine how much your benefits are taxed. If you file as an individual and your combined income is over $25,000, you’ll probably owe taxes on a portion of your benefits. For joint filers, the threshold is $32,000.
Some states also tax Social Security, but many don’t. States like Florida, Texas, and Illinois don’t tax benefits at all. Others follow rules similar to those of the federal government. It’s worth checking your state’s policy so you know what to expect.
As we’ve mentioned, when you start collecting Social Security is a huge factor in determining how much you receive. You can start at 62, but your monthly payment will be lower. Waiting until your full retirement age, typically between 66 and 67, means a larger check. If you wait until age 70, your benefit amount will be even higher.
If you keep working while collecting benefits before retirement, your payments may be reduced depending on your earnings. Once you reach full retirement age, you can work and collect benefits without any reduction.
Deciding on the best time to start depends on:
- Your income needs
- Your health
- Your plans for retirement
It’s useful to run the numbers and see what is best for your situation. Need help getting started? At Savvy Advisors, we can help with your retirement planning.
How to Set Up a Social Security Account Online
You can create your Social Security account in just a few minutes. It’s that simple. Plus, it’s an easy way to track your benefits.
Once your account is set up, you can check your earnings history, see your estimated benefits, and determine when you’ll reach full retirement age. If you’re already getting benefits, you can also view your payment history and update your information.
Cost-of-Living Adjustment (COLA) Updates for 2026
Every year, Social Security benefits may increase to keep pace with inflation. This increase is called a cost-of-living adjustment (COLA). It helps your benefits maintain their buying power as prices rise over time.
The COLA for 2025 was 2.5%, and the Social Security Administration will announce the 2026 update in the fall. These changes are based on government inflation data and apply automatically to those receiving benefits.
You can check the SSA website or news coverage later this year for the official 2026 update.
What Happens to Unused Social Security Benefits
Social Security doesn’t work like a personal savings account. If you pass away without using all your benefits, the money doesn’t go to waste. Instead, it stays in the Social Security Trust Fund and supports the program for others.
This helps fund benefits for current and future retirees, people with disabilities, and survivors. It’s part of how the system stays available for those who qualify.
Make the Most of Your Benefits
Getting the most out of Social Security starts with understanding how it works and preparing for the future. Here are a few key things to keep in mind:
- Know your full retirement age so you know when it’s time to start collecting.
- Check your earnings record to make sure it’s accurate. Mistakes affect your benefit amount.
- Understand how working in retirement might impact your payments if you claim early.
- Look into spousal or survivor benefits if you’re married, divorced, or widowed.
- Stay updated on COLA changes each year so you know what to expect.
If you need more help putting together a plan, consider working with a financial advisor or visiting our wealth management section.
John Khoury is a Principal Wealth Manager at Savvy and brings 20+ years of wealth management experience working with families, business owners, and organizations. He has a passion for providing fiduciary advice to his clients and helping them with complex wealth management. He specializes in transitions, such as retirement, business sales or other liquidity events, paying for college, divorce, and the loss of a loved one. Before joining Savvy, John was VP Sr. Financial Consultant at Schwab for 15 years and VP Financial Consultant at Fidelity for 8 years. At Schwab, John worked with 400 high-net-worth families and organizations, with over $300M in advisory services. John Khoury lives in Boston Metrowest with his wife and three children. In his free time, he enjoys sports, family time, and volunteering with his local educational and charitable organizations.
Material prepared herein has been created for informational purposes only and should not be considered investment advice or a recommendation. Information was obtained from sources believed to be reliable but was not verified for accuracy. All advisory services are offered through Savvy Advisors, Inc. (“Savvy Advisors”), an investment advisor registered with the Securities and Exchange Commission (“SEC”). Visit https://www.ssa.gov/ for more information on the United States Social Security Administration.
What Are Social Security Benefits?
Social Security benefits are monthly payments from the federal government that provide steady income to people who have retired, are living with disabilities, or are surviving family members of someone who has passed away. For many, these payments are a key source of support. They help cover essentials like housing, food, and healthcare during retirement or times of need.
Below, we’ll walk you through all the basics and beyond:
Social Security is a government program that provides monthly payments to people who qualify, such as retirees, people with disabilities, etc. It’s funded through payroll taxes– money taken out of your paycheck every pay period.
To qualify, you earn “credits” by working and paying into the system. Most people need 40 credits, which equals roughly 10 years of work. The amount you receive depends on how much you earned over your working life. The more you earn and pay in taxes, the more you can receive later, up to the maximum limits available.
There are four main types of Social Security benefits. Each is designed to help different groups of people depending on their situation. Here’s a look at each one:
Retirement Benefits
These benefits are for people who have worked or paid into Social Security over the years. You can start collecting as early as age 62. However, waiting until your full retirement age, usually between 66 and 67, means you’ll earn a bigger check. If you wait until 70, your monthly payments will be even higher.
Disability Benefits (SSDI)
If you become disabled and can’t work, you may qualify for Social Security Disability Insurance, or SSDI. These benefits differ from other disability programs because you must have worked and paid Social Security taxes before becoming disabled. SSDI is not the same as SSI or general assistance programs.
Survivor Benefits
If someone who worked and contributed to Social Security passes away, their family members, such as a spouse, child, or dependent parent, could receive monthly payments. The amount depends on the worker’s earnings and the survivor's relationship to that person.
Supplemental Security Income (SSI)
SSI is different from SSDI. It’s a separate program for people who have limited income and resources, regardless of whether they’ve worked in the past. It’s often used by seniors or people with disabilities who don’t qualify for SSDI. SSI is funded by general tax revenue, not payroll taxes.
The amount you get from Social Security depends on how much you earned during your working years and when you decide to start collecting benefits. The government looks at your highest 35 years of earnings to determine your monthly payment.
You'll likely receive more if you made more money over time and waited until your full retirement age. For 2025, the average benefit is around $1,900. The maximum is over $4,800 for those who wait until age 70. There’s also a minimum benefit for people who worked for many years at lower wages.
Your payment will differ from someone else’s, so check your estimate through your Social Security account.
You may have to pay taxes on your Social Security benefits depending on your income. At the federal level, if you have other income, such as wages, interest, or withdrawals from retirement accounts, up to 85% of your benefits may be taxable.
Every year, the IRS sets income thresholds to determine how much your benefits are taxed. If you file as an individual and your combined income is over $25,000, you’ll probably owe taxes on a portion of your benefits. For joint filers, the threshold is $32,000.
Some states also tax Social Security, but many don’t. States like Florida, Texas, and Illinois don’t tax benefits at all. Others follow rules similar to those of the federal government. It’s worth checking your state’s policy so you know what to expect.
As we’ve mentioned, when you start collecting Social Security is a huge factor in determining how much you receive. You can start at 62, but your monthly payment will be lower. Waiting until your full retirement age, typically between 66 and 67, means a larger check. If you wait until age 70, your benefit amount will be even higher.
If you keep working while collecting benefits before retirement, your payments may be reduced depending on your earnings. Once you reach full retirement age, you can work and collect benefits without any reduction.
Deciding on the best time to start depends on:
- Your income needs
- Your health
- Your plans for retirement
It’s useful to run the numbers and see what is best for your situation. Need help getting started? At Savvy Advisors, we can help with your retirement planning.
How to Set Up a Social Security Account Online
You can create your Social Security account in just a few minutes. It’s that simple. Plus, it’s an easy way to track your benefits.
Once your account is set up, you can check your earnings history, see your estimated benefits, and determine when you’ll reach full retirement age. If you’re already getting benefits, you can also view your payment history and update your information.
Cost-of-Living Adjustment (COLA) Updates for 2026
Every year, Social Security benefits may increase to keep pace with inflation. This increase is called a cost-of-living adjustment (COLA). It helps your benefits maintain their buying power as prices rise over time.
The COLA for 2025 was 2.5%, and the Social Security Administration will announce the 2026 update in the fall. These changes are based on government inflation data and apply automatically to those receiving benefits.
You can check the SSA website or news coverage later this year for the official 2026 update.
What Happens to Unused Social Security Benefits
Social Security doesn’t work like a personal savings account. If you pass away without using all your benefits, the money doesn’t go to waste. Instead, it stays in the Social Security Trust Fund and supports the program for others.
This helps fund benefits for current and future retirees, people with disabilities, and survivors. It’s part of how the system stays available for those who qualify.
Make the Most of Your Benefits
Getting the most out of Social Security starts with understanding how it works and preparing for the future. Here are a few key things to keep in mind:
- Know your full retirement age so you know when it’s time to start collecting.
- Check your earnings record to make sure it’s accurate. Mistakes affect your benefit amount.
- Understand how working in retirement might impact your payments if you claim early.
- Look into spousal or survivor benefits if you’re married, divorced, or widowed.
- Stay updated on COLA changes each year so you know what to expect.
If you need more help putting together a plan, consider working with a financial advisor or visiting our wealth management section.
Meet
John Khoury
John Khoury is a Principal Wealth Manager at Savvy and brings 20+ years of wealth management experience working with families, business owners, and organizations. He has a passion for providing fiduciary advice to his clients and helping them with complex wealth management. He specializes in transitions, such as retirement, business sales or other liquidity events, paying for college, divorce, and the loss of a loved one. Before joining Savvy, John was VP Sr. Financial Consultant at Schwab for 15 years and VP Financial Consultant at Fidelity for 8 years. At Schwab, John worked with 400 high-net-worth families and organizations, with over $300M in advisory services. John Khoury lives in Boston Metrowest with his wife and three children. In his free time, he enjoys sports, family time, and volunteering with his local educational and charitable organizations.
Material prepared herein has been created for informational purposes only and should not be considered investment advice or a recommendation. Information was obtained from sources believed to be reliable but was not verified for accuracy. All advisory services are offered through Savvy Advisors, Inc. (“Savvy Advisors”), an investment advisor registered with the Securities and Exchange Commission (“SEC”). Visit https://www.ssa.gov/ for more information on the United States Social Security Administration.
