What Happens If You Claim After Your Fra
If you wait until youre age 70 to start claiming benefits, then youll get an extra 8% per yearor, in total, 132% of your primary insurance amount for the rest of your life. Claiming after you turn 70 doesnt increase your benefits further, so theres no reason to wait longer than that.
The longer you can afford to wait after age 62 , the larger your monthly benefit will be. Nevertheless, delaying benefits doesnt necessarily mean that youll come out ahead overall. You also need to weigh in some other factors, including your expected longevity and whether you plan to file for spousal benefits. You will also need to consider the tax, investment opportunity, and health coverage implications.
Retirement And Spousal Benefits Applications
In order to apply for benefits, certain guidelines must be met. A person must be at least 61 years and nine months old to apply. If you try to apply more than four months before you retire, you will not be successful.; A person applying for spousal benefits must not be receiving any other benefits. These guidelines can be found on the Social Security website. If you have any questions, call your local SS office.
When Benefits Will Begin
If your application is approved before you reach at least the minimum retirement age for people born in the same year as you, you will typically begin receiving your Social Security retirement benefits one month after you are entitled to receive them. For instance, if you are eligible to receive benefits beginning in February, you will receive your first payment in March.
Benefits Of Retiring At Full Retirement Age
Weve already established that your age plays a huge role in how much retirement benefits youre entitled to. The earlier you file for retirement, the lesser you will get. And waiting until your full retirement age will make you eligible for the full amount of your benefits.
But when is the full retirement age? Some would say its 65. But the full retirement age, according to the SSA, depends on when you were born.
If you were born in 1937 or earlier, your full retirement age is 65. This gradually increases by two months for every year thereafter. For those born between 1943 to 1954, the FRA is 66. While those born in 1960 or later will reach full retirement age at 67. See the full FRA chart from SSA here.
If your FRA is at 67, filing for retirement at 62 will reduce your benefits by about 30%. This percentage decreases as your retirement age increases. For example, if you opt to retire at 63, your benefits will only be reduced by 25%. While retiring at 64 will only take away 20% of your benefits. At 65, you will lose 13.3% of your retirement benefits and only 6.7% if you retire at 66.
For those born before 1960 , the reduction is much lesser. You can view the full schedule here.
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.
Why You Should Start Collecting Social Security Benefits Long Before Turning 70
If you want your monthly Social Security benefit to be as large as possible, you’ll have to wait until age 70 to claim it. But that’s not the right choice for everyone despite the fact that;delaying earns you bigger checks.
In fact, there are plenty of circumstances when you’d want to start your retirement benefits much sooner even as soon as 62 when you first become eligible. And there’s one situation where starting at a younger age absolutely makes sense.
Here’s what it is.
These Misunderstandings About Social Security And Medicare Could Cost You Big Money
- Print icon
- Resize icon
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.
Don’t Miss: Where Do I Go To Replace Social Security Card
How Soon Can I Take Social Security
When it comes to receiving the maximum Social Security benefit possible, timing is important. Sometimes beneficiaries may receive more by delaying withdrawal, but some older adults may need the funds sooner.
Start by asking yourself some questions:
- Do I want to retire early?
- Do I want to/need to work past age 70?
- What happens to my Medicare if I work past age 65?
The SSA website offers future planning calculators, opens new window to help you estimate things that can affect retirement. These include life expectancy, pension eligibility, spousal benefits and retirement age.2
While you can take benefits as early as age 62, it may not be recommended. Only those on disability, or surviving spouses, can take Social Security earlier than 62.3
Your full retirement age, also known as normal retirement age, determines if you can receive full benefits. While the original full retirement age was 65 for all, heres a snapshot of how the law has changed:
If you take Social Security up to 36 months before your full retirement age, your benefit will be permanently reduced by 5/9 of 1%. If you withdraw more than 36 months early, your benefit is reduced by 5/12 of 1% each month.4
What Is Full Retirement Age
In addition to how much youve earned over the years, the size of your monthly Social Security benefit depends on when you were born and the age when you start claimingdown to the month.
Youll receive your full monthly benefit if you start claiming when you reach what Social Security considers your full retirement age , sometimes also referred to as normal retirement age. FRA was 65 when Social Security began, but it has been raised to 67 for anyone born in 1960 or later. To find your FRA, see the chart below.
|Finding Your Full Retirement Age|
Also Check: How Change Address Social Security
In A Rush To File For Social Security Benefits At Age 62 Many People Are But Slow Down And Do The Math First Or You Might Regret It
When it comes to claiming Social Security retirement benefits, you may want to consider waiting to start benefits when youre 70.
That means not starting benefits when youre 62 , nor even full retirement age .
I know that starting benefits at age 70 might be a tough thing to reconcile with but it doesnt mean that you have to work until youre 70.
Here are three reasons why delaying taking your Social Security benefit to age 70 is a decision you may want to consider:
How Much Can You Expect To Get
Your Social Security retirement benefit payment is based on how much you made during your working years. The more you earned, the more you’ll get when you retire.
Your Social Security retirement benefit payment is also affected by the age at which you decide to retire. You can retire as early as age 62, but if you retire before your full retirement age, your benefits will be permanently reduced, based on your age. For example, if you retire at age 62, your benefit would be about 25 percent lower than what it would be if you waited until you reach full retirement age.
You also need to remember that monthly premiums for Medicare Part B are usually deducted from monthly Social Security benefits. Retirement is a great time to look into the pros and cons of a private Medicare Advantage plan.;
Retirement benefits are based on the recipients lifetime earnings in work in which they paid Social Security taxes. Higher income translates to a bigger benefit, up to a point. The amount to which retirees are entitled is modified by other factors, most crucially the age at which they first claim benefits.;
For reference, the estimated average Social Security retirement benefit in 2021 is $1,543 a month. The maximum benefitthe most an individual retiree can getis $3,148 a month for someone who files for Social Security in 2021 at their full retirement age.
You May Like: How To Figure Out Your Social Security Number Online
If You Work While Getting Social Security
Yes, you can work full or part-time while also getting Social Security retirement benefits. However, if you have not yet reached your full retirement age, and if your net income from working is higher than the annual earnings limit, your annual benefits will be reduced. Beginning in the month you reach full retirement age, Social Security will stop reducing your benefits no matter how much you earn.
During any full calendar year in which you are under full retirement age, Social Security deducts $1 from your benefit payments for every $2 you earn above the annual net income limit. The income limit changes every year. In 2017, the income limit was $16,920.;
What If Your Income Falls Short
Many workers won’t be able to achieve the maximum Social Security benefit amount, and that’s OK. There are still ways you can boost your monthly payments.
One option is to work a little longer. To calculate your benefit amount, the Social Security Administration uses an average of your earnings over the highest-earning years of your career. Chances are you’re earning more toward the end of your career than you were when you first started working.
Even if you’ve already worked 35 full years, by continuing to work a little longer, you can have more higher-earning years included in your average income. That, in turn, will result in a larger benefit amount.
Another way to boost your benefits is to wait to claim them. You can claim benefits at age 62 or anytime after that, but the longer you wait , the more you’ll receive every month. In fact, by waiting until age 70 to claim, you can receive your full benefit amount plus up to 32% extra each month.
Keep in mind, too, that these benefit adjustments are permanent. No matter how long you live, you’ll continue earning larger checks each month if you delay claiming benefits.
Many older adults rely on Social Security to make ends meet in retirement, so it’s important to make sure you’re making the most of your benefits. Even if you can’t quite reach the maximum benefit amount, you may be able to collect more than you think.
The $16,728 Social Security bonus most retirees completely overlook
The Motley Fool has a disclosure policy.
Don’t Miss: How Fast To Get Replacement Social Security Card
No More File And Suspend
Note that the claiming strategy called file and suspend, which allowed married couples who have reached their FRA to receive spousal benefits and delayed retirement credits at the same time, ended as of May 1, 2016. However, spouses born before Jan. 2, 1954, who have attained their FRA may still be able to file a restricted application. It allows them to claim spousal benefits while delaying their own benefits up to age 70.
Social Security benefits can be taxable if your combined income is high enough.
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.
You May Like: How To Get Name Corrected On Social Security Card
When Is The Best Time To Apply For Social Security Disability Or Supplemental Security Income
Social security disability insurance and;supplemental security income are federal programs designed to provide financial support for persons with disabilities. When you apply for Social Security disability, its crucial to complete the paperwork correctly. You also need to provide;supporting documents for your claim to be approved. The timing of your SSDI/SSI application is also important. This guide provides the facts to help you through your application process.
Costs Of The Solution
Two issues that are likely to arise in any discussion of fixing this problem are its cost to the Social Security trust fund and its cost to the federal budget. With regard to the cost to the Social Security trust fund, there are three ways to look at the issue.
One way is to view the cost relative to costs in a world in which no pandemic had occurred. For example, the cost could be measured using the economic assumptions in the most recent ;Social Security trustees report , which were formulated before the pandemic began. From this perspective, the cost would be zero because the legislative change would restore the world of Social Security benefits to what it would have looked like had there been no pandemic.
A second way of looking at the issue is to view the cost of the change relative to costs in a world that reflected economic assumptions indicative of the economic recession caused by the pandemic. From this viewpoint, there would be a cost associated with fixing the problem. For example, the chief actuary of the SSA estimates that if the AWI in 2020 were to fall 5.9 percent below its 2019 level, the AWI adjustments proposed by Chairman Larson would cost $90 billion in present-value dollars for the 75-year period from 2020 through 2094about 0.02 percent of taxable payroll over that period. . The cost over the 10-year period from 2020 to 2029 would be about $21 billion in nominal dollars.
You May Like: How Long Does It Take To Receive Social Security
How And When To Apply For Social Security Benefits
- B.S., Texas A&M University
Applying for Social Security benefits is the easy part. You can apply online, by telephone or by walking into your local Social Security office. The hard part is deciding when to apply for your Social Security retirement benefits and rounding up all the documents you’ll need when you do.
Should I Wait Until Full Retirement Age To Apply For Social Security
Receiving Social Security at age 62 means that you will receive a reduced payment compared with waiting for full retirement age. For those born in 1960 or later, the reduction is 30%, and all reductions are permanent. If you delay taking your benefits past full retirement age, then you receive an 8% increase for each full year that you do so, up until you reach 70, at which point the increases stop.
Every individual can calculate their own full retirement age based on their specific birthday, to consider locking in the maximum amount of Social Security benefits.
Recommended Reading: How To Get Tax Documents From Social Security
There Are Two Aspects To This Key Question Find Out About Them Both
Social Security will play a vital role in your retirement finances, and in your planning, deciding when to apply for Social Security benefits will be a key consideration that will have an impact throughout your retired years. There are two aspects to the question of when to apply for Social Security, and both are important in their own way. Below, we’ll look at both angles to try to give you some answers.
The procedural angle The easier answer to the question of when to apply for Social Security deals with application process itself. The Social Security Administration advises that you should apply for Social Security three months before you want your benefits to start. For those who want to take benefits at the earliest available age of 62, that means that the SSA will start accepting applications when you are 61 years and nine months old.
One thing that many retirees don’t realize is that Social Security and Medicare use the same application process. Accordingly, the SSA recommends you apply for Medicare three months before your 65th birthday even if you don’t plan to start your Social Security benefits until a later date.
The meat of the questionOf course, saying you should apply three months before you want your benefits to start doesn’t address the question of when you should start your benefits. Answering that question requires personalized consideration, but many of the factors are common to everyone.