Last Modified on January 17, 2020

Social security is a type of benefit provided by the US government to retirees after a certain age. There are various aspects to social security that defines how well you can leverage its advantage. For example, these benefits can be taken as early as at the age of 62, but delaying it is often recommended. This also relates to the schedule adopted for social security payment. Unfortunately, many people get confused about payment dates and see their effort going in vain. 

Here are some important rules of the social security payment schedule that can help you enjoy the full potential benefits of the scheme:

Standard Rules

As a standard norm, social security benefits are usually deposited into your retirement account every Wednesday. The week in which the date falls depends on your date of birth. Here’s how the date is determined:

If you were born between the 1st and 10th of the month, then you will get your social security payment on Wednesday of the second week of every month. In case your birthdate falls anywhere between 11th and 20th of the month, the payment will be transferred on the Wednesday of the third week. Lastly, if the date falls anywhere between the 21st and 31st of the month, then you will get the benefit on the last Wednesday of the month. 

Payment Rules Exceptions

Although the schedule seems well organized and follows a regular pattern, there are some exceptions involved that can complicate things for some people. These can alter the date on which the payment arrives and hence disturb the entire social security schedule. However, knowing these special cases in which rules tend to change can help you devise a better financial plan. 

There are different waivers for different rules. 

• If the beneficiary is a child or a spouse receiving compensation based on the retirement of someone else, then the payment schedule will follow a normal course. 
• If anyone starts receiving benefits before May 1997, then the payment will be made on the 3rd day of every month. 
• Similarly, if someone is receiving both social security and supplemental security income benefits, then also the payment is made on the 3rd day of every month. 
• Finally, if the subjected date of payment falls on a holiday, it will be credited on the previous working day. 

It is always good to keep the schedule of payment calendars for the subsequent years handy. These can be downloaded from the official federal government websites.

Payment Delivery

There are a couple of ways through which social security payments are electronically transferred to your retirement account. You can either opt to get payment in the form of direct deposit or opt for a direct express debit card. In direct deposit, the amount is automatically transferred to your bank account on the scheduled day of the payment. As soon as the transfer is complete, you are notified with an email or text message on your phone.

In the direct express method, payments are made through the card. This is helpful in case you do not use a bank account or seem unwilling to get money through the direct deposit method. The express debit card works like a normal card and can be used almost anywhere. You can use it to withdraw money from an ATM or when you are buying daily use items such as groceries, etc. You can also use the card for automatic deductions for paying monthly bills. 

The sole purpose of providing multiple social security payment options is to forge a sense of trust in the minds of retirees. Also, these options help if someone has had a bad experience with one method and is looking to explore the other one. Furthermore, electronic payments are more reliable, accurate, and fast as compared to traditional methods of depositing a check. 

Social Security Taxes

The tax levied on your social security benefits depends on your income. The government has set certain caps to determine whether your social security benefits are taxable or not. If your income post retirement is above the capped limit, some amount of the social security benefits are taxed. 

If we talk about precise numbers, the individuals with a retirement income ranging between $25,000 and $34,000 are liable to pay income tax on half of their social security benefits. This is applicable only for single-filers. If the income exceeds this limit, the amount of taxable amount climbs up to 85%. 

Couples who jointly file their social security benefits have to pay tax if their income ranges between $32,000 and $44,000. Here, 50% of the benefits are taxable for married individuals. If the amount exceeds $44,000, the percentage of taxable benefit increases to 85%.

Also Read – Are social security benefits affected by Marriage? 

Financial experts suggest many diverse ways to avoid taxes on social security benefits. The amount of total yearly tax you pay should allow you to withhold your taxes from social security premiums. You can also opt for other methods to avoid taxes such as IRA withdrawals before filing, Roth IRA accounts, retirement income source management, etc. 

As a rule of thumb, you should always check your social security account to keep a lookout on the amount of taxes you have to pay so that the payable income doesn’t take a toll on your retirement planning. 

To Sum it Up

Social security payments are an added advantage to retirees. But many individuals still fail to understand its importance, given the number of aspects it entails. Being mindful about the payment schedule of social security can help retirees realize when to expect an added monthly profit. When you are certain about the dates, you can plan ahead with definite financial goals in mind. Knowing the payment roster also plays an important role in managing your assets, maximizing your savings on taxes, and reducing your expenses. 

Are you concerned about the dates of your social security payments? You can take professional assistance from financial advisors who can shed light on the payment dates of your benefits and plans.