Monday, May 16, 2022

How To Apply For Early Social Security

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How Does My Longevity Figure Into This

Use Social Security’s Grid Rules for an Early Approval

This question underscores an important caveat accompanying Mr. Meyers projections, which assume a life span to 90: Not only may your mileage vary it certainly will. Financial advisers routinely illustrate outcomes assuming long life spans as a way to test the retirement plans they draw up.

Men who reach 65 have a 33 percent chance of living to 90, and women a 44 percent chance, according to the Society of Actuaries. And for married couples, theres a 63 percent chance that one spouse will live to at least 90. Yet a recent study by the society found that half of us wrongly estimate our life expectancy by five or more years, with 23 percent overestimating and 28 percent underestimating.

Those numbers illustrate the classic argument for Social Securitys value as insurance against outliving our financial resources. But the challenges of the pandemic economy may turn that argument on its head.

Sometimes an economic analysis points to what seems like a good decision for a large group of people, Mr. Cotton said. Economics can tell you whats best for an entire group of people but youre one person. Its something you need to decide on your own.

What If I Take Benefits Early

If you choose to receive your Social Security check up to 36 months before your full retirement age, be aware that your benefit is permanently reduced by five-ninths of 1% for each month.

If you start more than 36 months before your full retirement age, the benefit is further reduced by five-twelfths of 1% per month, for the rest of retirement.

For example, lets assume that you stop working at age 62. If your full retirement age is 66 and you elect to start benefits at age 62, the reduced benefit calculation is based on 48 months. This means that the reduction for the first 36 months is 20% and 5% for the remaining 12 months. Overall, your benefits would be permanently reduced by 25%.

When Can You File For Social Security

The earliest when you can apply for Social Security benefits is at age 61 and nine months, and you can expect to receive your first payment four months laterthe month after your birthday. Typically, Social Security benefits are paid the month after they are due or must be specified. For example, the Social Security website states that an individual who wants their benefits to start in May will receive their first benefit check in June.

For example, if you turn 62 on Dec. 15, then your first full month of eligibility is January, and your payment for that month will arrive in February. If you have already reached age 62 and met all other eligibility criteria, then you may begin collecting benefits in the same month when you apply if you specify, although your first payment still would not arrive until the following month.

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D You Can Stop Working And Not Begin Receiving Your Retirement Benefits

We calculate your benefits based on your highest 35 years of earnings. If you stop working before you have 35 years of earnings, or you have low earnings for some years, this will affect your benefit calculation. However, if you wait to start benefits after you reach full retirement age, your benefits will increase for each month you do not receive them until you reach age 70. There is no incentive to delay filing for your benefits after age 70.

If you are not receiving your Social Security benefits when you turn 65, you will need to apply for Original Medicare three months before you turn 65. If you dont sign up for Medicare Part B when youre first eligible at age 65, you may have to pay a late enrollment penalty for as long as you have Medicare coverage.

What Are The Requirements

The ins and outs of applying for Social Security benefits

It is important to learn the requirements for receiving Social Security benefits so that you arent wasting your time with an application when you dont even meet the requirements. Here are the basic requirements:

  • In order to sign up for Social Security, you must be at least 61 years and 9 months old.
  • In order to get the benefits immediately, you must be 62 years of age.
  • Apply less than 4 months before the benefits start date.

As you can see, the requirements for applying for Social Security are uncomplicated and pretty basic.

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How To Get A Social Security Card

  • Gather your documents. Learn what documents youll need to get a card. Select your situation:
  • Adult or child
  • Original, replacement, or corrected card
  • U.S. born citizen, foreign born U.S. citizen, or noncitizen
  • Apply online for a replacement card. Apply online if youre not changing anything on your card and you are eligible. This option is available in most states. You will need to make a my Social Security account first. Or complete an application. If you can not apply online, fill out an application and return it to the SSA. Find out where to take it in person or mail it.
  • After You Submit Your Application

    We’ll send you an acknowledgment letter after we receive your retirement application. We may also contact you if we have questions or need additional information.

    Approximately two weeks before your first retirement warrant, weâll mail you a First Payment Acknowledgment Letter that provides important information about your service retirement, including the date and amount of your first retirement check.

    You may sign up to receive your retirement checks through direct deposit at the same time you submit your retirement application. To set up direct deposit online, log in to myCalPERS. Go to the Retirement tab and select Payment Options. Alternatively, you can complete and mail the Direct Deposit Authorization to:

    CalPERS Benefit Services Division

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    Before You Make Your Decision

    There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit will be reduced. Each person’s situation is different. It is important to remember:

    • If you delay your benefits until after full retirement age, you will be eligible for delayed retirement credits that would increase your monthly benefit.
    • That there are other things to consider when making the decision about when to begin receiving your retirement benefits.

    apply

    You Can Receive Benefits Before Your Full Retirement Age

    Early Retirement Benefits And Social Security Benefits

    You can start receiving your Social Security retirement benefits as early as age 62, but the benefit amount will be lower than your full retirement benefit amount.

    If you start receiving your benefits before your full retirement age, we will reduce your benefits based on the number of months you receive benefits before you reach your full retirement age.

    If you wait until age 70 to start your benefits, your benefit amount will be higher because you will receive delayed retirement credits for each month you delay filing for benefits. There is no additional benefit increase after you reach age 70, even if you continue to delay starting benefits.

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    The Downside Of Early Applications

    Applying for Social Security benefits at age 62 can lower the amount of your monthly benefits by as much as 30%. This can significantly reduce the available funds you will have to enjoy your retirement. Delaying your application for Social Security, on the other hand, can have a positive impact on the amount you will receive each month in these benefits.

    The Social Security Administration has established a Full Retirement Age of between 66 and 67 for most retirees. You can see the exact amount of your earned benefits by visiting the Social Security website. This online resource can also provide information on your FRA and the impact of claiming your Social Security benefits at various stages of your journey.

    Applying for Social Security at age 62 not only affects the amount you receive in benefits. Cost-of-living adjustments, known as COLA, are based on your benefit amount, you will receive a smaller COLA increase than if you had waited until your FRA to apply for Social Security.

    Special Power Of Attorney

    Through the CalPERS Special Power of Attorney, you can appoint a representative to make retirement-related decisions on your behalf, should you become incapacitated. The CalPERS special power of attorney grants authority specifically for CalPERS retirement issues. For this reason, we recommend filing a Special Power of Attorney form , regardless of whether you already have a power of attorney set up through another resource.

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    Continuing Benefits & Deductions

    Health Coverage

    If you’re currently a member of the CalPERS Health Program, you must meet specific requirements to continue your health insurance coverage into retirement, or maintain the right to re-enroll in the future after retirement.

    To continue your CalPERS health benefit coverage after retirement, you must meet both of the criteria below:

    • Be enrolled in a CalPERS health plan upon separation from employment, either in your own name or as a dependent
    • Retire within 120 days of your separation from employment

    If you don’t meet both requirements before you retire, you’ll lose all future rights to be in the CalPERS Health Program. If your family members are included in your CalPERS health plan at the time of your death, their enrollment will continue automatically if they’re eligible for and receive a monthly allowance.

    Public Agency or School Members

    If your employer doesn’t contract with CalPERS for health benefits, contact your employer to determine if your benefits will continue.

    Dental Coverage

    To continue dental coverage into retirement, you must:

    • Be enrolled in a state-sponsored dental plan on the date of your separation from employment
    • Retire within 120 days of your separation

    Long-Term Care

    If you’re enrolled in CalPERS Long-Term Care and have premiums deducted from your paycheck, you’ll need to call 982-1775 before you retire to find out how to continue your premium deductions.

    Other Deduction Payments

    What Is A Social Security Card

    Should I retire early or apply for Social Security ...

    Your Social Security card is an important piece of identification. Youll need one to get a job, collect Social Security, or receive other government benefits.

    When you apply for a Social Security number , the Social Security Administration will assign you a nine-digit number. This is the same number that is printed on the Social Security card that SSA will issue you. If you change your name, you will need to get a corrected card.

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    You’re Only Working Part Time

    If you claim Social Security prior to your full retirement age while still holding down a part-time job, you might have your benefits reduced if your work income exceeds the annual limit. For 2021, if you are under full retirement age, your benefits go down by $1 for every $2 your income exceeds $18,960. If you reach full retirement age in 2021, your benefits go down by $1 for every $3 your income exceeds $50,520 prior to reaching full retirement age. If you’re working part-time to help make ends meet, taking Social Security at 62 might make sense.

    Social Security Retirement Age

    Full retirement age is when you first become eligible for full Social Security retirement benefits. If you were born in 1960 or later, your full retirement age is 67. If you were born before that, the age is somewhere between 65 and 66 years and 10 months, depending on your birth year.

    No matter what your full retirement is, you can start collecting benefits as early as age 62 or as late as age 70. Your birth year and your age when you start to collect benefits affect your monthly benefit amount.

    Social Security Benefits by Age and Year of Birth

    Year of Birth

    30.00%

    You can earn delayed retirement credits each month that you wait to collect beyond your full retirement age, up until age 70. This increases your monthly payment by two-thirds of 1% for each month that you waitor 8% a year.

    Even though more money is usually better, that’s not always the case with collecting Social Security benefits. Here are four times when it might be better to forgo the larger check and start collecting benefits sooner.

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    What To Consider Before Filing For Social Security

    A larger benefit check sounds great, but there are tradeoffs, and soon-to-retire folks should consider multiple issues before they decide one way or the other on when to file. If you really want to consider all the avenues, then youll have to think about your finances and longevity two issues that people have a hard time grappling with.

    But heres the key tradeoff: you can file early and take a reduced benefit, expecting that a shorter lifespan will mean you receive more now, or you could file at full retirement age or later and claim a bigger check, and eventually live long enough to claim more than the first approach.

    Social Security is like longevity insurance, says Brent Neiser, a certified financial planner and former chair of the Consumer Advisory Board at the Consumer Financial Protection Bureau. Its a stream of payments that will not stop throughout your life, so delaying your benefits to keep those payments as large as possible forms a helpful base to your retirement plan.

    Neiser urges those who have not saved enough for retirement to use whatever means possible to postpone their Social Security benefits until after their full retirement age to help boost their future income.

    You can use personal savings to help bridge the gap, but ideally you should plan to work a little longer , Neiser says.

    Why Waiting May Make Sense

    Can I Apply For Social Security Retirement Benefits In Advance of Age 62

    Waiting until your FRA to apply for Social Security can increase the amount you receive in benefits each month. You will receive an 8% increase in your benefit payment for every year you delay receiving benefits. If you can put off receiving Social Security payments until age 70, that could add up to an almost 25% increase in the amount you receive each month.

    Take some time to consider whether applying for Social Security benefits to begin at age 62 or at any age after that best helps you fund your retirement in the most practical way. The Social Security Administration can provide you with financial figures that will assist you in your decision-making process. Taking a hard look at the financial implications of retiring at various ages and at your personal situation will allow you to enjoy greater financial flexibility during your retirement years.

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    You’re Concerned Social Security Will Disappear

    Some people are concerned about potential Social Security changes in the future, such as higher retirement ages, lower benefits or higher taxes on benefits. As a result, they want to take the sure thing as soon as possible. In a 2017 Social Security summary, the government said Social Security trust funds will be depleted in 2034. Even then, however, annual Social Security taxes are projected to keep benefits at almost three-fourths of current levels.

    If You’re Not Sure Why You Received A Payment

    Contact the authorizing agency directly to find out why they sent the payment. You may be able to find the authorizing agency in the memo line of the check. View this diagram of a sample Treasury check to help you locate the authorizing agency contact information on your own check. Scroll about half way down the page to see the diagram.

    If you’re unable to find which agency authorized the payment, . They can help you determine which government agency you need to contact. To find which RFC you need to call, look for its city and state at the top center of the check.

    Use the Treasury Check Verification System to verify that the check is legitmate and issued by the government.

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    No One Else Is Relying On Your Benefits

    In the event of your death, a surviving spouse, minor or disabled child can receive money from the Social Security Administration based on the amount of your benefits. For example, a surviving spouse can receive between 71.5% and 100% of your benefit amount, depending on the surviving spouse’s age. A disabled child can receive 75% of your benefits each month even after you’re gone.

    If no one else can qualify for benefits based on your record, you might want to retire early because no one is depending on that money. If everything else falls into place and you meet the minimum Social Security retirement age, consider collecting your benefits early and enjoying life.

    Whats Full Retirement Age

    Why Should You Avoid Taking Social Security Benefits Early

    Full retirement age is when youre eligible to receive full Social Security benefits. Your full retirement age depends on your birth year: Under current law, if you were born in 1951 or later, your full retirement age is now some point after age 65all the way up to age 67 for those born after 1959. If you were born before 1951, youve already reached age 66 and full retirement age.

    Retirement ages for full Social Security benefits

    If you were born in

    Your full retirement age is

    1950 or earlier

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    You’re Planning Your End

    Your Social Security benefits stop paying at your death, so if you die prior to collecting benefits, you’ll have missed out on benefits entirely. You need to figure out how to maximize your Social Security income, instead. For example, say you’re planning to wait until age 70 so you can claim the larger monthly benefit. If you die right before your 70th birthday, you won’t receive any benefits. It’s very difficult to predict how long you’ll live, especially if you’re in good health now. However, if you are suffering from a terminal or serious illness, the increased monthly benefit for delaying Social Security might not be worth it.

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