Social Security 2023: What To Know If You’re in Your 40s

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If you’re in your 40s, collecting Social Security might seem like the very last of your financial concerns since you’re decades away from eligibility age. However, according to experts, there are good reasons to think ahead and plan in the ways that are in your control. Many people don’t even know that you can track your Social Security statement online and get a sense of where you’re at. Here we look at key information about Social Security that you need to know if you’re in your 40s.

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Check Your Social Security Statement

The first thing people in their 40s should do is pull their Social Security statement on my Social Security, according to Ryan Ortega, the founder of Third Line Financial Planning.

“This will show how much you made in each year you worked, along with your estimated benefit. It’s crucial for retirement planning to know these numbers,” he said.

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Your Social Security Earnings Are Based on Your Top 35 Years of Earnings

“Social Security benefits are based on the number of years you have worked, your annual earnings and the date you start receiving benefits,” said Steve Sexton, CEO of the Sexton Advisory Group. “Your main focus should be to maximize those Social Security payments in retirement.”

Your Social Security earnings are index-adjusted based on your top 35 years of earnings, Sexton explained. “If you work for more than 35 years, the additional years will replace smaller earnings years, increasing your Social Security benefit.”

Validate Your Earnings Every Year

To make sure you really are getting an accurate benefit down the road, David Freitag, a financial planning consultant and Social Security expert with MassMutual, recommends, “A good practice is to log in to your every year when you are preparing your income tax return to ensure your earnings are being reported correctly.”

Avoid Zeros on a Social Security Statement

When possible, this means try not to go too long without work, Freitag said. “Given the widespread negative impact of the pandemic on businesses and jobs, and increased needs for caregiving of children and aging relatives, some will be coming out of the pandemic with zeros or greatly decreased earnings cited on their Social Security statements. Since retirement benefits are based on the top 35 years of earnings, if 35 or fewer years is all you have to show, this could negatively impact your benefits for life.”

The Later You Pull Social Security Funds, the More You Receive

It can be tempting to start taking Social Security as soon as you turn 62, but, to maximize Social Security benefits, plan on applying for it once you’re 70, said Alvin Carlos, CFA, CFP, financial planner and managing partner at District Capital Management.

“Your benefit increases by 8% every year you delay taking your Social Security benefits past full retirement age, until age 70.”

Widows and Divorcees Are Entitled to Spousal Benefits

According to Freitag, in a 2021 poll of near-retirees, nearly one-third (30%) did not know that a divorced person might be able to collect Social Security benefits based on an ex-spouse’s earnings history. “Timing is the key. To qualify, the marriage must last for 10 years or more. Spousal benefits and survivor benefits can be thousands of tax-advantaged dollars for those who qualify,” he said.

Plus, the payment of these benefits to a divorced spouse does not reduce the regular Social Security benefits to the other spouse.

Social Security Is Unlikely To Go Bankrupt…

You may have heard the alarmist concerns that Social Security is projected to run out of money in 2034, but don’t worry, said Paw Vej, leader at, it’s not going bankrupt. “The Board of Trustees has found that the program’s net cash outflow will accelerate each year after 2019, but with the payroll tax and taxation of benefits, Social Security will always have enough money. As long as Americans keep working, there’s nothing to worry about.”

…However, There Potentially Will Be a Reduced Payout

However, if the 2034 projection is correct, Vej said, it’s been estimated that a 21% benefit cut will be needed to sustain payouts through the year 2092. “A 21% benefit cut won’t go unnoticed, and it’s a clear warning to people in their 40s to reduce their expected reliance on Social Security.”

You Can’t Live On Social Security Alone

The stark truth everyone needs to understand about Social Security is that it’s not possible to live on Social Security alone, said Carter Seuthe, CEO, Credit Summit. “You need to put money into retirement accounts–ideally multiple accounts. Inflation is too high and you’re likely going to get less money later than your parents would have gotten.”

Additionally, he recommends you make sure the max is being taken out of your paychecks.

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This article originally appeared on Social Security 2023: What To Know If You’re in Your 40s