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.
The Second Best Choice
Single Social Security claimants who want to hold off until age 70, but find they cant quite wait any longer should select age 69 for the best trade off, according to Christopher Jones, chief investment officer at Edelman Financial Engines.
That sacrifice may be as little as a few thousand extra dollars in additional lifetime benefits in exchange for starting a year earlier, according to Jones.
If youre single, well tell you you should wait until 70, Jones said. It is generally preferable to do so.
“But its not quite as critical as it is going from 66 to 67, or 67 to 68.
In a low interest rate environment, it’s hard to beat the potential increases for every year you delay claiming your benefits, Jones said.
Thats a guaranteed real rate of return backed by the federal government, Jones said. You cant get real rates of return at 6% to 8% right now not even close in the marketplace.
At What Age Are You No Longer Eligible To Apply For Social Security Disability
Havent applied for early retirement, but youre between 60 and 65 years old? Then youre in luck! You can apply for Social Security disability up until one year reaching before your full retirement age . Typically, that means you can still get approved for SSD benefits at 65, if you meet all other requirements. But once you reach your FRA, your SSD benefits automatically convert into regular Social Security retirement payments. That means any claimants age 66 and older cannot qualify for SSD, because they now qualify for regular Social Security.
How Will Working Affect Social Security Benefits
In a recent survey, 68% of current workers stated they plan to work for pay after retiring.1
And that possibility raises an interesting question: how will working affect Social Security benefits?
The answer to that question requires an understanding of three key concepts: full retirement age, the earnings test, and taxable benefits.
Whether You Need To Consider Your Spouse
When one spouse passes away, the other spouse could choose to receive survivors benefits if those benefits are higher than the widow/widower’s current benefits. The amount of survivors benefits is based on work history and age when the deceased spouse claimed benefits. If you were the higher-earning spouse, you may want to maximize your Social Security benefits by waiting to claim them so your spouse gets the highest possible survivors benefit after you pass on. You can learn more in our guide to survivors benefits.
Ultimately, the right decision will depend on whether you are better off getting your money ASAP — even if you get less of it per month — or getting more money later in life.
Timing And Your Health Coverage
Your health insurance coverage can also play a role in deciding when to claim Social Security benefits. Do you have a health savings account to which you would like to keep contributing? If so, note that if youre age 65 or older, then receiving Social Security benefits requires you to sign up for Medicare Part A, and once you sign up for Medicare Part A, youll no longer be allowed to add funds to your HSA.
The SSA also cautions that even if you delay receiving Social Security benefits until after age 65, you might still need to apply for Medicare benefits within three months of turning 65 to avoid paying higher premiums for life for Medicare Part B and Part D. If you are still receiving health insurance from your or your spouses employer, however, then you might not yet have to enroll in Medicare.
On March 17, 2020, all Social Security offices were closed completely due to the COVID-19 pandemic. As of Aug. 5, 2021, they are only open by appointment, and to get an appointment, you need to be in a limited, critical situation. Most people will have to transact their business online, by phone, or through the mail.
The 10 Factorsto Consider To Determine When You Should File For Social Security Benefits
When youre making the decisionabout when to file , there are atleast 10 factors that you need to consider to get to the right answer. All ofthese factors are very important to account for but there can be disastrousconsequences for ignoring the last two in particular.
Factor1: Whats Your Gender?
Your decision about when to collect SocialSecurity begins with your gender. The decision to delay or not is moreimportant for women than it is for men. There are two reasons for this:
The decision to file later and get ahigher benefit is possibly more important for a woman to consider. According todata from the Social Security Administration, men usually have a higher benefitamount than the women theyre married to.
If thats your case, you need to exercisecaution filing based on the impact your benefit will have to your wife .
Factor 2: What Does Your Marital History Look Like?
Next, consider your marital history. If you had prior marriages, figure out if you areeligible for benefits from any of those past marriages that could boost yourown benefit.
For example, if you have aneligible deceased spouse or ex-spouse, it could make sense to file for asurvivors benefit as early as age 60 and switch to your own benefit later.
If you have an ex-spousewho is still living you need to figure out if you are entitled to a higherbenefit from the spousal provisions
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You Could Help Keep Your Tax Bill Lower
Many people dont realize that they could end up paying federal income taxes on as much as 85% of their Social Security benefits.
If you file a federal tax return as an individual and your provisional income is between $25,000 and $34,000, then up to 50% of your benefits may be federally taxable as earned income. If your provisional income is more than $34,000, you may have to pay federal income taxes on up to 85% of your Social Security benefits.
If you file a joint return and you and your spouse have a provisional income between $32,000 and $44,000, up to 50% of your Social Security benefits could be taxed. If your provisional income with your spouse is more than $44,000, up to 85% of your Social Security benefits may be taxable.
If you dont have much taxable income in retirement, you may not have to pay any federal taxes on your Social Security benefits. But if youre like many Baby Boomers you may have a hefty amount of your retirement savings in tax-deferred IRAs or 401s and the federal income taxes on those savings could be substantial.
To help with that, you may be able to take distributions from your tax-deferred accounts , etc.) now, and perform some Roth conversions, and/or perhaps conversions to other vehicles that can provide you with tax-free income, such as life insurance, so that Social Security benefits later may not be taxed at all by the federal government.
These Misunderstandings About Social Security And Medicare Could Cost You Big Money
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Pop quiz question: How old do you have to be to qualify for full Social Security benefits?
65, you say? . Wrong.
Youre hardly alone. Thats the answer given by two out of three seniors, according to a survey conducted by Helpadvisor.com, which helps seniors understand what retirement and healthcare benefits they are entitled to and what options they may have. Its one of several misunderstandings not only about Social Security, but Medicare as well the two most important federal programs that seniors should know how to navigate. Not knowing the basics could cost you money that youre entitled to.
So when ARE you eligible for full retirement benefits from Social Security? It depends on when you were born. According to the Social Security Administration, if you were born:
- Between 1943 and 1954, the full retirement age is 66
- If you were born between 1955 and 1960, the full retirement age varies according to the year and month of your birth, with 67 the minimum age for full benefits
- If you were born in 1960 or later , the full retirement age is 67
Want to make even more? Instead of taking Social Security at your full retirement age, try waiting until youre 70. Why? Because every year you wait, your benefits go up by about 8%. But dont wait longer than 70, because your benefits wont increase after you reach that age.
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Social Security Disability Programs
In addition to retirement benefits, the Social Security Administration manages two programs that provide benefits to people who are disabled or blind.
- Social Security Disability Insurance Program
- SSDI supports disabled or blind individuals by providing benefits based on their workers contributions to the Social Security trust fund. Your contributions are based on your earnings or your spouses or parents earnings while in the workforce. Your dependents may also be eligible for SSDI benefits based on your earnings.
- Supplemental Security Income Program
- SSI benefits are paid out as cash assistance to people with limited incomes and resources who are elderly, blind or disabled. These benefits may also include blind or disabled children. SSI payments are a federal benefit funded by the general fund of the United States not the Social Security trust fund. Some states provide additional state supplemental benefits in addition to the federal SSI payments.
In some cases, people may be eligible for both SSI and SSDI at the same time. The Social Security Administration calls these concurrent benefits. This can happen when a disability qualifies you for Social Security Disability Benefits, but you only get a small amount of monthly SSDI benefits. This may qualify you to receive SSI benefits as well.
Comparing SSDI and SSI Programs
|Up to 85%|
Income Taxes for Other Benefit Programs
Social Security Benefits For Surviving Spouses
If your spouse was receiving Social Security benefits upon their death, you must report the death as soon as possible. You can call the Social Security Administration at 1-800-772-1213 between 7 a.m. and 7 p.m. on weekdays or visit your local Social Security office in person.
You are eligible for a one-time, lump-sum death benefit of $255 from Social Security if:
- You were receiving benefits on your spouses record at the time of death, or
- If you were living in the same household as your spouse at the time of death.
Any benefits received in the name of your spouse during the month of death or later must be returned to the Social Security Administration as soon as possible.
If your spouse worked long enough under Social Security, you may be eligible for Social Security benefits. You must be age 60 or older or disabled and 50 or older to qualify.
How much youll receive depends on the percentage of your spouses benefit as well as your age and the type of benefit youre eligible for.
You must apply for survivor benefits in person. You can call Social Security at 1-800-772-1213 to request an appointment.
I Have Some Savings Should I Live On That Rather Than Claim Social Security Now
This is a very personal decision that depends greatly on your circumstances. Maintaining an emergency fund is always important, and never more so than during times of economic volatility. But people with very substantial savings can draw down safely to cover living expenses while delaying their claim.
The loss of earned income means you will be in a lower tax bracket, and rates are at historically low levels under the Tax Cuts and Jobs Act of 2017.
Theres no better time to take money out of a 401 or I.R.A. than when your income is relatively low and you have a lower marginal tax rate, Mr. Finke said.
A delay of just a few years can be very beneficial. A 62-year-old with a full retirement age benefit of $1,500 would increase her likely lifetime benefits by more than $100,000 by waiting until that point to file, according to a projection by William Meyer, a co-founder of Social Security Solutions, which offers software aimed at helping retirees make optimal claiming decisions. Mr. Meyers calculation assumes that our retiree lives to 90 and that Social Securitys cost-of-living adjustment is 2 percent each year.
But the pandemic has added a new dimension to claiming decisions for most retirees, the retirement researcher Dirk Cotton said. Since most Americans have modest savings, if any, many of them will need to hang on to what they have.
Supplemental Security Income For Those Aged 65 & Older
Theres another benefit called Supplemental Security Income that people can qualify for once theyre at least 65 years old. People traditionally refer to SSI as welfare, and it pays no more than $794/month. Once you hit the magic age of 65, you can apply for SSI payments if:
- Your current income is less than $1,310
- You have less than $2,000 in countable assets
To apply for SSI, youll need to call your local Social Security office and speak to an agent on the phone. You can find the right number to call by visiting the SSAs office locator page and entering your current ZIP code.
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Applying For Social Security
- Generally, you should apply for Social Security retirement benefits three months before you want your benefits to begin. Even if you dont plan to receive benefits right away, you should still sign up for Medicare three months before you reach age 65.
- If you were born before 1938 and you meet all other requirements, you can receive benefits beginning with the first full month you are age 62. However, if you choose to begin receiving benefits before age 65, your benefits will be reduced to account for the longer period over which you will be paid.
- The full retirement age is 65 for persons born before 1938. The age gradually rises until it reaches 67 for persons born in 1960 or later. Social Security benefits are payable at full retirement age for anyone with enough Social Security credits. As you work and pay taxes, you earn credits that count towards eligibility for future Social Security benefits. You can earn a maximum of four credits each year. Most people need 40 credits to qualify for benefits. People who delay retirement beyond full retirement age get special credit for each month they dont receive a benefit until they reach age 70.
- To find out what your retirement age is, use the Social Security Retirement Age Chart at www.ssa.gov
- You should speak with a Social Security representative in the year before you plan to retire. It may be to your advantage to start receiving your retirement benefits before you actually stop working.
ave questions? Call at 874-4618.
Who Should Delay Benefits
If you are married and the higher wage earner, it generally makes sense for you to wait as long as possible to claim.
One reason for that is Social Security payments are based on mortality tables that have not been updated since 1983. And life expectancies have increased since that time.
People are living longer than they would have been expected to back in 1983, and therefore the credits that you get for delaying Social Security are worth more to you than they would be if they were actuarially fair, Jones said.
Holding off until age 70 makes sense particularly for the higher earner of a married couple because their benefits will in turn determine spousal and survivor benefits for their significant other.
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Youll Get A Bigger Monthly Social Security Check If You Wait Until 70
Claiming Social Security before you reach full retirement age will result in a reduction in benefits as much as 25% to 30% less than you would have received if you had waited. That reduction is permanent.
Instead, if you wait to take your benefits until after your FRA, Social Security will add an 8% delayed retirement credit to your eventual monthly payout each year you hold off, up until age 70.
Thats a guaranteed return of 8% per year of deferral after your FRA, which could be more than you might receive with any other fixed products right now. Its definitely more than the cost of living adjustments that Social Security beneficiaries have been getting for the past decade, which have averaged about 1.5% a year.
Those COLA increases are not always enough to keep up with true inflation. And, when there is a COLA for Social Security, it may be coupled with a Medicare premium increase.