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.
Is It 62 67 Or 70 Three Retirement Experts Weigh In
Seniors have many choices for when to start receiving their Social Security checks. And the decision to claim at a particular age can impact both monthly and lifetime benefits.
Unfortunately, there’s no one-size-fits-all solution to choosing the best time. To help you decide when you should file for Social Security benefits, three Motley Fool retirement experts make an argument for claiming them at three of the most common ages: 62, 67, and 70.
You Want To Start A Business
Some people think of retirement as a time to relax, but you might see it as an opportunity to do things you couldn’t do before, such as starting your own business. For example, you might have put off starting a business before because you were afraid you wouldn’t be generating enough income. Social Security benefits could provide enough income to let you launch your business. And if your business is successful, the income it generates could be more than enough to offset the future reduction in benefits.
When A Spouse Dies
When one spouse dies, the surviving spouse is entitled to receive the higher of their own benefit or their deceased spouses benefit. Thats why financial planners often advise the higher-earning spouse to delay claiming. If the higher-earning spouse dies first, then the surviving, lower-earning spouse will receive a larger Social Security check for life.
When the surviving spouse hasnt reached their FRA, they will be entitled to prorated amounts starting at age 60. Once at their FRA, the surviving spouse is entitled to 100% of the deceased spouses benefit or their own benefit, whichever is higher.
Can A Person Who Is Due A Public Pension Also Collect Social Security Benefits
Two rules could reduce benefits for people who are also entitled to a public pension on earnings not covered by Social Security.
One rule is the windfall elimination provision , which applies to people who worked at jobs covered by Social Security but also worked as noncovered government employees and are due a pension.
When it is time to claim benefits, many people are unprepared for these cuts, Mr. Blair said. Possible W.E.P.-related reductions are not reflected in the workers Social Security statement, which shows the history of annual earnings and estimates of future benefits only for jobs covered by Social Security.
You can have someone who looks at the Social Security statement and it shows a benefit of $1,000 at full retirement age, Mr. Blair said. But the individual a teacher who is due a public pension, for example may be surprised later if the benefit is much lower, he said.
In addition to W.E.P. reductions, a government pensioner who applies for a Social Security spousal or survivor benefit can face reductions. The government pension offset reduces those benefits by two-thirds of the government pension.
Pensioners are exempt from the W.E.P. offset if they paid into Social Security for 30 years or more in jobs with substantial earnings .
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How Does Work Affect Your Social Security Payments
Many people continue to work beyond retirement age, either by choice or out of necessity. But if you are receiving Social Security benefits, you need to be aware of how working can affect your benefit payments. Earning income above Social Security thresholds can cause a reduction in benefits and mean your benefits will be taxed.
Whether it makes sense to work and collect Social Security at the same time is a complicated assessment that depends on how much you earn and when you begin taking Social Security benefits.
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If you work and are full retirement age or older, you can earn as much as you want and your benefits will not be reduced. However, individuals may begin taking Social Security retirement benefits early beginning at age 62. If you are younger than full retirement age, there is a limit to how much you can earn and still receive full benefits. If you earn more than $18,960 , Social Security will deduct $1 from your benefits for each $2 you earn over the threshold. In the year you reach full retirement age, you can earn up to $50,520 without having a reduction in benefits. However, if you exceed $50.520 in earnings, Social Security will deduct $1 from your benefits for each $3 you earn until the month you reach full retirement age. Once you reach full retirement age, your benefits will no longer be reduced.
For more information on Social Security, .
When Should You Start Claiming Social Security Benefits
One of the most consequential financial decisions a family child care provider can make is when to start claiming Social Security benefits.
You can begin receiving Social Security benefits as early as age 62, or as late as age 70. The longer you wait before collecting Social Security, the higher your monthly benefit will be.
Some family child care providers may want to collect Social Security benefits as soon as possible because of immediate financial needs, bad health, or other family considerations.
Waiting to collect also has its rewards: for every year you wait to collect after your full retirement age your benefit will grow by about 8% a year. Thats a lot.
The Social Security website has an Retirement Estimator that can help you determine what your benefit will be depending on what age you start collecting benefits.
But, this estimator doesnt tell you when is the best time to claim your Social Security benefits and it doesnt take into consideration how to integrate your spouses Social Security benefits with yours.
To get a more accurate estimate of your future benefits, use this free online calculator:
What’s My Spouse’s Plan For Social Security
If you are married, the two of you should collaborate on timing your retirement benefits claims. Your freedom to be strategic about timing rests on whether you both qualify for benefits on your own wage history. If you do, one of you could claim early for current income, and the other could delay claiming to support future income.
You’ll have less flexibility if one of you will collect spousal benefits based on the other’s wage history. Usually, the primary income earner must start receiving benefits before the spousal benefit is available.
Also, spousal benefits are reduced when claimed before FRA, but they are not increased for claiming after FRA. Given that delaying the primary income earner’s benefits also delays the spousal benefits, waiting past FRA to claim may be harder to justify. You’d delay two incomes, but only the primary income earner will see higher income later.
How To Stop Social Security Check Payments
The SSA can not pay benefits for the month of a recipients death. That means if the person died in July, the check received in August must be returned. Find out how to return a check to the SSA.
If the payment is by direct deposit, notify the financial institution as soon as possible so it can return any payments received after death. For more about the requirement to return benefits for the month of a beneficiarys death, see the top of page 11 of this SSA publication.
Family members may be eligible for Social Security survivors benefits when a person getting benefits dies. Visit the SSA’s Survivors Benefits page to learn more.
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Youre 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.
Apply For Retirement Benefits
Starting your Social Security retirement benefits is a major step on your retirement journey. This page will guide you through the process of applying for retirement benefits when youre ready to take that step. Our online application is a convenient way to apply on your own schedule, without an appointment. You can also apply by phone or by appointment at a Social Security office.
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When Older People Are Eligible For Social Security
Today, older adults become eligible for full Social Security retirement benefits at age 66 or 67 depending on their birth year and whether they or their spouse have met the work credit requirement.
For anyone born in 1929 or later, the minimum work credit requirement for Social Security benefits is 40 credits or 10 years of work. The year you can start taking full Social Security benefits is known as your full retirement age or normal retirement age.
|Age for Receiving Full Social Security Benefits|
|1960 and later||67|
If you were born on January 1 of any year, refer to the previous year when calculating your full retirement age.
Unlike Medicare, older people can opt to start taking their benefits before their full retirement age. The earliest you can begin taking Social Security benefits is age 62. However, if you begin taking Social Security payments before your full retirement age, you will receive a reduced monthly benefit for the remainder of your life.
If you are a widow or widower, you can start claiming your spouse’s reduced Social Security benefits when you are age 60, or 50 if you are disabled. You can then switch to taking your own full benefit at your full retirement age.
You can also choose to delay your Social Security benefit past full retirement age until age 70. This will often make you eligible for delayed retirement credits, which increase your monthly benefit for the remainder of your life.
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Are You Still Working
If youre collecting a paycheck that sufficiently covers your expenses, the expert advice is clear-cut: You shouldnt file for Social Security until either you stop working or you reach your full retirement age.
Dont start collecting benefits at 62 just because you can, says Kathy Stokes, a senior advisor at AARP who specializes in financial issues.
For one thing, if youve got a job and opt for Social Security before full retirement age, your benefits will be held back by $1 for every $2 you earn over $17,040.
For another, if youre at your earnings peak, your salary could help to increase your monthly benefit, which is based on the highest 35 years of earnings that youve paid Social Security taxes on.
And, as you likely know, holding off on collecting benefits is a surefire way to increase the amount of your monthly check.
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If you start collecting at 62, your benefit will be approximately 30% less than if you wait until full retirement age, according to the Boston College Center for Retirement Research.
Your benefits continue to grow for each year you put off collecting up until age 70, at which point your check would be about 76% bigger than if youd claimed at age 62.
Are You Currently Healthy
Your health status may affect your timing decision, although possibly not in the way you expect. Beneficiaries already struggling with poor health in their early 60s may be tempted to take benefits as early as they can.
Receiving lower payments earlier means you get more benefits over a lifetime if you pass away relatively young. In general, the break-even point falls at about age 80 and 4 months when comparing lifetime benefits starting at 62 with a reduced benefit and starting at 70 with an increased benefit. For those who are currently ill and concerned they wont live to age 80, early benefits may sound like the right call.
But Weston cautions against this: Starting early is a common timing mistake, especially if you think you wont live beyond the break-even age where the larger checks for waiting more than offset the smaller checks you passed up. Westons concern about this strategy is if you outlive the break-even point and are stuck receiving a reduced benefit while also suffering from poor health. Most people dont understand how long theyre likely to live and the risks if they outlive their savings, Weston explains.Be sure to take careful stock of your financial and physical health when deciding when to start benefits.
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How The Social Security Administration Could Be More Helpful
And thats one of the things Koenig and his co-authors think needs to change.
Theyd like the Social Security Administration to improve its online tools to better emphasize and explain the importance of the age you start to claim benefits, as well the effect on a spouses Social Security benefits.
The BPC authors also want the Social Security Administration to reframe claiming decisions to better reflect their implications. For example, instead of talking about 62 as early eligibility age, the agency could call it the minimum benefit age, they wrote. Age 70 could be described as the maximum benefit age.
The term early eligibility doesnt really provide any information that if you do claim at an early age, you will get a reduced benefit and a lower level for the rest of your life, said Koenig. People may not see any negative.
A Reader Poses A Question Thats Trickier Than It Seems
One of the things I think Im pretty good at is answering questions about federal retirement, but a recent email about Social Security left me stumpedtwice.
Greg, a longtime federal employee, wrote to me:
Social Security benefits max out at age 70, I get that. But filing too soon loses a portion of the maximum amount, and filing too late loses a whole monthly benefit. I have searched all over, and nowhere can I find out exactly what the best date is to request benefits begin. My wife reaches age 70 in the middle of April and we were wondering how to maximize her benefit by selecting the best starting date.
I thought Greg was asking a very common question: When is the best time to file for Social Security retirement? So I replied as follows:
There are a lot of theories about claiming Social Security benefits. Social Security has a fact sheet on this question as well. There are many factors that can influence the best time for you:
- Are you married or single?
- What is the age difference between you and spouse, if married.
- What is the income difference between you and your spouse, if married.
- Do you have children age 18 or younger?
- Are you widowed?
- Are you still working or fully retired?
- Do you have other sources of retirement income that could bridge the time between retirement and a later application for Social Security?
- Do you have good health and family history that shows longevity?
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Can You Still Work While Receiving Social Security
You can continue to work while you receive Social Security benefits. But there is a limit to how much you can earn and still receive full benefits. The earning limit may be adjusted each year.
If you earn above the limit, Social Security will deduct a certain amount of your benefits each year.
Social Security Benefits, Earning Limits and Penalties
|SSA deducts $1 from your benefits for every $3 you earn above the limit|