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How To Start Social Security Retirement Benefits

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Calculate The Best Time To Start Social Security

How Do I Apply For My Social Security Retirement Benefits Online – Documents Needed To Apply For SSI

If you are confused about when to start, you can use the Social Security Explorer part of the NewRetirement Retirement Planner to compare your monthly income and maximum lifetime payout at different ages.

Or, you might consider the following rules of thumb:

  • Take Early: The only people who should consider taking their Social Security early are those who absolutely need the money immediately, or those who do not expect to live for very long, due to illness
  • Take at Full Retirement Age: Should you have reason to believe that you will not live past the age of 80, then generally speaking you will maximize your social security benefits if you take them when you reach your Full Retirement Age.
  • Wait as Long as Possible: On the other hand, if you are confident that you will live past the age of 80 or 85, then most experts recommend that you defer your social security for as long as you can , so as to maximize the benefits you receive from it.
  • Other: If you have dependent children, the additional benefits you receive for them might make filing when you are younger worthwhile.

It can also be a very good idea to have an overall retirement plan before you decide when to start your Social Security benefits. The NewRetirement Retirement Planner can help you assess all of your sources of retirement income and whether or not you will have enough to cover your expenses. This tool was recently named a best retirement calculator by the American Association of Individual Investors .

How A Social Security Break

Figuring out the right time to start taking Social Security benefits isnt always a straightforward process. A Social Security break-even calculator can help you get some perspective on the numbers so you know what you stand to gain or lose by taking benefits earlier versus later.

Social Security break-even calculators help you find the best age to start taking retirement benefits. They do this by comparing your cumulative Social Security retirement benefits paid at age 62, your full retirement age and at age 70 and estimating how long it would take the benefits paid at age 70 to break even with benefits paid starting at age 62.

Heres a simple calculation to give you an idea of how a Social Security break-even calculator works. Say that you have the option to begin receiving $1,200 a month in benefits at age 62. Youd receive $1,700 in benefits if you wait until full retirement age at 66. Or you could receive $2,200 a month in benefits by delaying them until age 70.

The break-even point represents when the cumulative benefits even out. So if you wait until age 70 to start taking benefits, it would take you until age 79 to break even with the benefit amount youd receive if you started taking them at age 62. If you were to start receiving benefits at age 66, it would take you until age 75 to break even with the benefits youd receive if you started them at 62.

Policy Basics: Top Ten Facts About Social Security

Social Security provides a foundation of income on which workers can build to plan for their retirement. It also provides valuable social insurance protection to workers who become disabled and to families whose breadwinner dies.

Eighty-five years after President Franklin Roosevelt signed the Social Security Act on August 14, 1935, Social Security remains one of the nations most successful, effective, and popular programs.

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Fact #: Social Security Provides A Foundation Of Retirement Protection For Nearly Every American And Its Benefits Are Not Means

97% of the elderly either receive Social Security or will receive it.

Almost all workers participate in Social Security by making payroll tax contributions, and almost all elderly Americans receive Social Security benefits. In fact, 97 percent of the elderly either receive Social Security or will receive it, according to Social Security Administration estimates. The near-universality of Social Security brings many important advantages.

Social Security provides a foundation of retirement protection for people at all earnings levels. It encourages private pensions and personal saving because it isnt means-tested in other words, it doesnt reduce or deny benefits to people whose income or assets exceed a certain level. Social Security provides a higher annual payout than private retirement annuities per dollar contributed because its risk pool is not limited to those who expect to live a long time, no funds leak out in lump-sum payments or bequests, and its administrative costs are much lower.

Indeed, universal participation and the absence of means-testing make Social Security very efficient to administer. Administrative costs amount to only 0.6 percent of annual benefits, far below the percentages for private retirement annuities. Means-testing Social Security would impose significant reporting and processing burdens on both recipients and administrators, undercutting many of those advantages while yielding little savings.

What A Social Security Break

How to Start Planning for Maximizing Social Security ...

In a nutshell, a Social Security break-even calculator can tell you when the best age is to start taking Social security benefits, in terms of how much money you could expect to receive over time. Going back to the previous example, lets assume that you track your benefit amounts over a 10-year, 20-year and 30-year period. Heres how your total benefits received would look over each of those periods, for all three starting points.

Your cumulative benefits after 10 years:

  • $144,000, starting at age 62
  • $122,400, starting at age 66
  • $52,800, starting at age 70

Your cumulative benefits after 20 years:

  • $288,000, starting at age 62
  • $326,400, starting at age 66
  • $316,800, starting at age 70

Your cumulative benefits after 30 years:

  • $432,000, starting at age 62
  • $530,400, starting at age 66
  • $580,800, starting at age 70

You can see that youd draw the most Social Security benefits in total if you wait until age 70 to start taking them, assuming you live to age 100. But that could be a big if when youre not in the best health.

What you have to keep in mind when using a Social Security break-even calculator is that the numbers are hypothetical. They dont take into things that could affect your ability to draw benefits or how far those benefits might go, such as:

Also Check: How To Get Your Social Security Money Now

When Will I Be Eligible To Receive Social Security Benefits

You must be 62 years old to begin receiving retirement benefits. When you reach the age of 61 and 9 months, you can apply.

If you begin collecting before reaching full retirement age, or FRA, Social Security cuts your amount.

Only then will you be eligible for 100% of your basic monthly benefit, which is based on your 35 highest-earning years.

If you wait until youre 70 to apply, youll earn more delayed retirement credits, which will increase your payment even more.

Other types of Social Security benefits may have a different start age:

  • Spousal benefits can start as early as age 62, as long as the spouse whose work record youre claiming is already receiving retirement benefits.
  • You can apply for survivor benefits on the record of a deceased spouse or ex-spouse when you are 60 years old 50 years old if you are disabled or any age if you are caring for the deceaseds under-16 or disabled child.

Why You Need To Sign Up For Electronic Payment

As of March 1, 2013, Social Security stopped mailing paper checks. Beneficiaries are now required to receive their monthly payments electronically.

There are two ways you can receive your benefits:

Direct deposit of your disability payment: This option deposits your payment into your bank account on the day you are paid.

You need a checking or savings account with a bank or credit union to use this option.

Direct Express Debit Card: If you do not sign up for direct deposit, your benefits will be paid to you via Direct Express debit card option.

The Direct Express debit card works anywhere Debit Mastercard are accepted.

You can also use your Direct Express debit card to get cash back at the grocery store or to purchase money orders at the post office.

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Your Retirement Age And When You Stop Working

Your retirement age is the age you begin receiving Social Security retirement benefits. For many people, this is not the same age youll stop working.

The age you stop working can affect the amount of your Social Security retirement benefits. We base your retirement benefit on your highest 35 years of earnings and the age you start receiving benefits.

Social Security Benefits Start Date

Rethinking Retirement: How to avoid your social security benefit being penalized

An individual first becomes eligible to receive Social Security benefits during the month after the month of their 62nd birthday.

Once you have applied, it could take up to three months to receive your first benefit payment. Social Security benefits are paid monthly, starting in the month after your birthday.

So if a person was born in August, his or her first month of eligibility is September.

Since the Social Security Administration pays individuals a month behind, the person will receive the September benefit in October.

If you would like to receive your first payment in the first month you are eligible, you will need to apply three months before your birthday.

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The Big One Delayed Retirement Credits

One of the most important factors in determining your Social Security benefit is timing. The earliest you can file for Social Security benefits is 62, with the latest being 70. The earlier you take benefits, the less you will receive the longer you wait, up to age 70, the more you will receive.

Depending on your benefit amount and at which age you decide to begin distributions, you could almost double the benefits you receive each month. This is because if you wait, you can use delayed retirement credits.

Delayed retirement credits are the financial reward Social Security gives you for putting off claiming your retirement benefit, AARP explains. Credits begin to accumulate the month you hit your full retirement age

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For each month from your full retirement age until age 70 that you postpone filing for benefits, the Social Security Administration increases your eventual benefit by about two-thirds of 1% a total of 8% for each year you wait. This means retirees who reach full retirement age at 67 but delay claiming until 70 will get an extra 24% tacked on to their monthly benefit.

The credits accrue through age 69 but work somewhat in the reverse if you decide to take benefits early.

Find: Nearly Half of Seniors Expect To Work After Retirement But There Might Be a Better Option

Social Security: How To Boost Your Benefit By $800

The average retiree collects around $1,500 in Social Security benefits per month. This can range up or down depending on lifetime earnings, and importantly, when you decide to start taking benefits.

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Inflation has thrown a wrench into Social Security benefits and how much they cover for the average American. Prices are up a whopping 6% overall in just the past 12 months alone. To put that into perspective: Inflation remained near zero for the better part of the last decade, and in less than a year, prices surged in almost every major category. In particular, grocery prices a sector that greatly affects senior citizens living on fixed incomes have surged upwards of 12% in some categories.

To alleviate this, 2022s cost-of-living adjustment will be 5.9% the largest COLA in over 40 years. If you, like millions of Americans, find yourself still needing more, here are some tried-and-true strategies to get you a significant boost in your income.

Find: Social Security 2022 How the COLA Will Increase Benefits for the Average Senior Couple

Recommended Reading: Will Social Security Recipients

Go To Restaurants That Offer Senior Discounts

Living on Social Security will mean you’re on a pretty tight budget, but it’s okay to eat out every once in a while — especially if you go to a restaurant that offers a senior discount. Many popular chains offer up to 25% discounts on meals for people 55 and older, even on takeout. For example, Chili’s offers a 10% senior discount every day and Uno Pizzeria & Grill has a 25% discount for seniors on Wednesdays, according to

How Retirement Benefits Work

When Should You Start Social Security Benefits? Do the ...

Social Security replaces a percentage of your pre-retirement income based on their lifetime earnings. The portion of your pre-retirement wages that Social Security replaces is based on your highest 35 years of earnings and varies depending on how much you earn and when you choose to start benefits.

When you work, you pay taxes into Social Security. We use the tax money to pay benefits to:

  • People who have already retired.
  • People who are disabled.
  • Survivors of workers who have died.
  • Dependents of beneficiaries.

The money you pay in taxes isnt held in a personal account for you to use when you get benefits. We use your taxes to pay people who are getting benefits right now. Any unused money goes to the Social Security trust fund that pays monthly benefits to you and your family when you start receiving retirement benefits.

Additional Information

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How Social Security Payment Schedule Works

When you receive your Social Security Retirement Benefits or Disability Benefits depends on your birthday.

  • If your birthday falls between the 1st and 10th of the month, youll receive SSDI benefits on the 2nd Wednesday of every month.
  • If your birthday falls between the 11th and 20th of the month, your benefits will come on the 3rd Wednesday of every month.
  • If your birthday falls between the 21st and the last day of the month, your payments will come on the 4th Wednesday of every month.

If you have any questions about the Social Security Benefits Start Date, please ask us in the comments section below.

If you found this article about the Social Security Benefits Start Date helpful, please help us get the word out by sharing it using the Share This button below.

What Start Date Should I Choose On My Application

I have scanned through the Ask Larry topics and have read your updated Get What’s Yours. I still am confused as to what start date I should use on my application so as not to incur a reduction in my benefit or my husband’s spousal benefit my actual birthday or the beginning of the next month. I turn 66 on 4/20/17 and want to begin my benefit. My husband will then restrict his application to spousal until he files at 70.

Social Security applications only ask you what month you want to start benefits, not the day. If you want to receive your full retirement age rate, you should elect to start your benefits effective with April 2017. Your husband should also start his spousal benefits effective with April 2017, assuming that he will be at least age 66 in that month.

Social Security benefits for the month of April are paid in May, and you can file up to 4 months in advance, or as early as this month. If you haven’t already done so, you may want to consider running the maximization software available on this website in order to make sure that your choosing the best filing strategy.

Best, Jerry

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Early Benefits Can Still Pay Off

However, taking early benefits can still pay off despite the reduced monthly check. But youll want to be sure you budget for a reduced benefit.

No one can predict how long youll live, but if youre facing a potentially significant reduction in life expectancy and are short of income, taking Social Security early may be appropriate, Neiser says.

Married women are also good candidates for claiming early benefits because they are likely to outlive their husbands. Those widows then become eligible to receive the greater of either their benefit or their late husbands benefit.

However, this scenario works only if the husband does not claim his benefits early. By not claiming early benefits, the husband effectively increases the monthly benefit his wife eventually receives. So youll want to calculate how filing early will affect your spousal benefit here.

If You Were Born Between 1943 And 1954 Your Full Retirement Age Is 66

Social Security: When should you start receiving retirement benefits?

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

The chart below provides examples of the percentage of your full retirement benefit amount you and your spouse would receive from age 62 up to your full retirement age.

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Income Tax Law Changes

Hi Laura, You would definitely want to claim spousal benefits when your husband starts drawing his benefits, but you wouldn’t do that by filing for and suspending your own benefits. If you file for and suspend your retirement benefits, you couldn’t be paid spousal benefits even if you qualify for them.

If you plan to wait until 70 to start drawing your retirement benefits, what you’ll want to do is file a restricted application for spousal benefits starting the first month of your husband’s entitlement to benefits.

Filing a restricted application means that you’re limiting the scope of your application specifically to spousal benefits only. You’ll then need to file a separate application for your retirement benefits when you want to switch to drawing on your own account, presumably at 70.

Also, your spousal benefit will be 50% of his primary insurance amount , which is equal to his full retirement age retirement benefit amount, not 50% of his increased benefit at 70.

However, since both you and your husband were born prior to 1/2/1954, that opens up a number of other possible filing options that you may at least want to consider. You and your husband may want to consider using my company’s software Maximize My Social Security or MaxiFi Planner to ensure your household receives the highest lifetime benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

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