Applying for Social Security is something most people only do once. While you can change your mind if you regret claiming too early, that’s tough for most people because you must pay back all that you’ve received from Social Security thus far.
Rather than deal with that, you should try to choose the right claiming age from the beginning. And to do that, you need to be able to answer the following questions.
1. What’s my full retirement age?
The Social Security Administration assigns everyone a full retirement age (FRA) based on their birth year. For today’s workers, it’s somewhere between 66 and 67. If you were born between 1943 and 1954, your FRA is 66. Then, FRA rises by two months every year thereafter until it reaches 67 for those born in 1960 or later.
Your FRA determines when you become eligible for your full Social Security benefit. Claiming before this age shrinks your monthly checks. For example, you only get 70% of your full benefit per check if you claim at 62 and your FRA is 75. If your FRA is 66, you’ll get 75% of your full benefit per check at 62.
Your FRA also dictates how large your maximum benefit is. You qualify for this at 70 when you’ll get 124% of your full benefit per check if your FRA is 67 or 132% if your FRA is 66.
If you’d like to know what your Social Security benefit will be based on your income to date, create a my Social Security account. The site contains a calculator that can show you how much you’ll get at various starting ages.
2. How long do I expect to live?
Your life expectancy influences how many years you claim Social Security and, by extension, how much money you’ll get from the program overall. It’s impossible to know exactly how long you’ll live, but you should have an estimate in mind when choosing your Social Security claiming age.
If you expect to live into your 80s or beyond, delaying Social Security will probably result in a larger lifetime benefit. But if you have a short life expectancy due to a terminal illness or poor health habits, signing up earlier might make more sense.
3. How will claiming affect other members of my household?
If you’re married or have other dependents, your household members may also qualify for Social Security benefits based on your work record or their own. It makes sense to plan your claiming strategy together to maximize your household benefits.
For example, if both spouses qualify for Social Security and have earned similar amounts over their lifetimes, it’s usually wise for both to delay benefits as long as possible if they’re trying to squeeze the most out of the program.
But if one person has earned significantly more than the other, the lower earner may prefer to sign up early. Their benefits can help the higher earner delay until they qualify for larger checks. Then, when the higher earner signs up, the Social Security Administration will automatically switch the lower earner to a spousal benefit if that’s worth more than what they’re already receiving.
Minor children or those with disabilities may also qualify for Social Security benefits based on your work record, but they can only claim these once you sign up. So if you have other members of your household who qualify for benefits, you may prefer to sign up sooner than you would have otherwise to claim these.
4. How will my claiming age affect my finances?
Once you’ve successfully answered these three questions, you should know what claiming age will give you the most money overall. But sometimes, waiting until that age to sign up isn’t always feasible. For example, if you think you’ll get the most money by delaying until 70 but you can’t afford to fund retirement on your own until then, you may have to sign up for Social Security early.
If this is the case for you, that doesn’t mean you have to sign up right away at 62. You can try for a happy medium — perhaps delaying a few months or years before signing up to give your checks a bit of a boost.
No matter when you sign up, you’ll get Social Security checks for the rest of your life. But if your goal is to get the most money possible, you have to take the above factors into consideration. Use them as your guide and choose the claiming age that makes the most sense for you right now, but don’t be afraid to adjust this over time if your plans change.
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