Thursday, May 19, 2022

When To Start Collecting Social Security

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Preparing To Make A Claim For Retirement Benefits

When Is The Best Time To Start Collecting Social Security? – Dave Ramsey Rant

Determine the eligibility necessities. You want to apprehend the fundamental eligibility necessities earlier than you start the manner of making use of for Social Security retirement advantages. You have to be as a minimum sixty-one years and nine months vintage to use for retirement advantages, you have to now no longer be presently receiving advantages for your Social Security record, and also you cannot have already implemented for Social Security retirement advantages.

  • Apply for retirement advantages about 4 months earlier than you need to begin receiving them. For instance, in case you need to get hold of advantages beginning in January, then you definitely must begin the manner as a minimum via way of means of October.
  • If you need to use for advantages to be able to begin greater than 4 months with inside the future, you declare will now no longer be capable to be processed.

What If I Change My Mind

If you receive Social Security benefits at a reduced rate, but then change your mind, you have the option of withdrawing your application and paying back to the government what you’ve already received . Then, you could restart benefits at a later date to take advantage of a higher payout. But you are limited to one withdrawal per lifetime.

For example, let’s say you elected to receive early benefits at age 62, but then decided to go back to work at age 63. You could withdraw your Social Security application within the first 12 months of receiving benefits, pay back the years worth of benefits you received, go back to work, and then wait until a later age to restart your benefit checks at a higher level.

For important details about repaying benefits please read the SSA publication If You Change Your Mind.

Calculate The Best Time To Start Social Security

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 .

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Applying For Social Security Benefits

Apply online. There are some unique methods wherein you may make you declare for Social Security retirement advantages. The maximum sincere of those is to use online via the SSA website: Completing this software must take much less than 15 mins and could offer the fundamental facts required, a good way to start processing your declare. This consists of questions on you, your family, and your paintings.

  • With this selection you may start on every occasion you like, and also you do not want to make an appointment or wait in a line.
  • You do not have to finish the complete shape multi functional go. You can store your development, a part of the manner via.

You Could Help Keep Your Tax Bill Lower

When Should You Start Collecting Social Security Benefits

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.

Recommended Reading: How To Maximize Your Social Security Benefits

Working While Receiving Benefits

Maintaining a job while receiving benefits creates another set of restrictions on collecting social security. You can apply for social security, receive the benefits, and maintain your current job or part time position. Even though that supplies you with two resources for income there is a set of limitations. If you are under the full retirement age for the entire year you are working and receiving social security, then $1.00 will be deducted from your benefit payment for every $2.00 you earn above the annual limit of $16,920. If you will be reaching your full retirement age within the year you are working and receiving social security benefits, then $1.00 will be deducted for every $3.00 above the annual limit of $44,880. Once you reach your full retirement age your earnings through social security will not be reduced no matter how much you earn at a full or part time job. It is important to fully understand these limits especially if you are applying for social security while working under the full retirement age. Depending on your annual salary you can drastically alter the amount of your benefit.

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.

Read Also: How Can I Reset My Social Security Account

Is It Best To Take Social Security At 62 Or Wait Until 66

Social Security payments are reduced if you claim them before your full retirement age, which is typically age 66 or 67, depending on your birth year. If you sign up at age 62, you will get 25% smaller Social Security payments if your full retirement age is 66 and 30% lower payments if your full retirement age is 67.

You May Be Getting Social Security Checks For A Long Long Time

When Can I Start Collecting My Social Security

Life expectancy is a critical factor in Social Security planning. Of course, no one can predict how long they will live, but according to the CDCs most recent figures, the average American who makes it to age 65 can expect to live another 19 years.

If your Social Security benefit at 70 is more than 75% higher than your benefit at 62, youre going to have a lot more money to take care of your needs as you age.

Dont forget that if youre married, the lower Social Security payment will go away when one of you passes away. If the spouse with the greater Social Security wage history waits as long as possible to file for benefits, he or she will leave behind a bigger benefit for the surviving spouse to live on.

Given that fewer and fewer Baby Boomers will have an employee pension to count on in retirement, it may make sense to maximize Social Securitys reliable income stream.

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When To Start Collecting Social Security: Designing A Case Study

Engineering Management, Systems Engineering, Engineering Economy, and Industrial Engineering

Page Count

Ted Eschenbach, P.E., is the principal of TGE Consulting, an Emeritus Professor of engineering management at the University of Alaska, Anchorage, and the Founding Editor Emeritus of the Engineering Management Journal. He is the author or coauthor of more than 200 publications and presentations, including 15 books. With his coauthors, he has won best paper awards at ASEE, ASEM, ASCE, and IIE conferences, and the 2009 Grant Award for the best article in The Engineering Economist. He earned his B.S. from Purdue in 1971, his doctorate in industrial engineering from Stanford University in 1975, and his master’s in civil engineering from UAA in 1999.


  • Citation

Eschenbach, T., & Lewis, N. A., & Zhang, Y. , When to Start Collecting Social Security: Designing a Case Study Paper presented at 2012 ASEE Annual Conference & Exposition, San Antonio, Texas. 10.18260/1-2–22233


Eschenbach, T., &  Lewis, N. A., &  Zhang, Y. , When to Start Collecting Social Security: Designing a Case Study  Paper presented at 2012 ASEE Annual Conference &  Exposition, San Antonio, Texas. 10.18260/1-2--22233

APA – LaTeX bibitem

\bibitem  Eschenbach, T., \&  Lewis, N. A., \&  Zhang, Y. , \emph  Paper presented at 2012 ASEE Annual Conference \&  Exposition, San Antonio, Texas.  10.18260/1-2--22233


MLA – LaTeX bibitem


EndNote – RIS

Social Security Spousal Benefits Loophole

A recent law changed the way many people can claim spousal benefits. The Bipartisan Budget Act of 2015 closed two Social Security spousal benefits loopholes mainly used by married couples.

Deemed filing

Prior to the law change, people who were eligible for earned benefits and spousal benefits were required to file for both at the same time, a practice known as deemed filing. But that was only until they reached full retirement age. Once they hit full retirement age, if they hadnt claimed any benefits, they could claim just their spousal benefits first, and delay taking their own earned benefits. That allowed them to rack up delayed retirement credits until they turned 70.

The 2015 law, however, changed the rules so that anyone born on or after Jan. 2, 1954 is affected by deemed filing even after he or she reaches full retirement age. So when someone files for one benefit, they must file for both, and will only receive the higher of the two amounts, with no opportunity to switch later.

People born on Jan. 1, 1954 or earlier, however, can still file a restricted application for just one benefit until theyve reached full retirement age.

There are two exceptions where deemed filing doesnt apply:

  • If youre taking care of a child who is younger than 16 or who is disabled
  • If you receive spousal benefits and are also entitled to disability. In those cases, you can file a restricted application for spousal benefits without also applying for earned benefits.
  • File and suspend

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    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.

    Maximizing Your Spousal Benefits

    Journal When to Start Collecting Social Security Benefits ...

    The earliest you can claim spousal benefits is 62but how early you claim plays an important role in maximizing your benefits. If you claim before you reach your full retirement age, you will permanently lower your monthly benefit and even your survivor benefit.

    While the Bipartisan Budget Act of 2015 ended some of the strategizing around spousal benefits, but there are still ways to maximize your spousal benefits:

    • If you were born before Jan. 2, 1954, and havent claimed your own benefits yet, you are still able to take advantage of the loophole. You can file a restricted application for spousal benefits at your full retirement age. For this to work, your spouse must have already filed for their benefits. This strategy would let you start receiving spousal benefits, while delaying taking your earned benefits, causing them to grow. When you turn 70, you would then switch to those earned benefits .
    • If you were born on Jan. 2, 1954 or later, and you are married, the higher earning spouse may consider delaying claiming their benefits until age 70 to increase the benefit with delayed retirement credits. Keep in mind, this would mean delaying when you can take your own spousal benefits, thus missing out a few years of those payments.
    • If youre divorced, youll get the maximum spousal benefit, 50%, if you wait to reach your full retirement age. But you have the advantage of not needing to wait for your ex to file for his or her own benefits first.

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    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.

    Estate Tax Law Changes

    Regarding benefit recomputations, your benefit rate can be recalculated after each year in which you have higher earnings than you had in one of your previous 35 years of wage-indexed earnings. The new rate would first be effective for benefits payable for the month of January of the year following the year in which you had the higher earnings. But you would still get the recomputation regardless of what month you claim benefits. Our software would allow you to determine what effect your future year earnings would have on you benefit rate. Best, Larry

    If My Friend Received A Lump Sum From Social Security, Will It Affect Her Benefit Amount?

    Hi Larry, My friend just started collecting Social Security. She was born in 1952 and started collecting at 67. She also took a lump sum payment. This sounds too good to be true but it also sounds like it might affect monthly amounts. She continues to work. I’ve been thinking of starting my receiving mine when I turn 67 next year. What can you tell me about getting lump sum payments? Thanks, Jill

    Hi Jill, Since your friend filed for benefits a year after she reached her full retirement age of 66, she was allowed to claim benefits retroactively for the maximum possible six months. Assuming that’s what happened, Social Security would then pay her back pay in a lump sum.

    Will My Earnings After 70 Affect My Social Security Benefits?

    Can I Get My Full Social Security Benefit With No Reduction Until I Start Collecting My PERS?

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    Who’s The Higher Earner

    Compare the estimates for you and your spouse, and pay special attention to the difference between your estimates. The higher earner is the spouse with the larger primary insurance amounts .

    When you’re deciding who will collect first and who should wait, consider having the lower earner collect first and having the higher earner wait. Over time, the higher earner’s increases will be worth more than the lower earner’s increases.

    And if one spouse’s estimates are more than twice as high as the other’s, it might make sense for both of you eventually to collect on the same spouse’s earnings record.

    In that situation, the spouse with the lower benefits can claim first based on his or her own earnings record and apply for spousal benefits later when the spouse with the higher benefits starts to collect.

    The longer the spouse with the higher benefit waits to start collecting, the higher benefits will be for both spouses. Delaying the higher earning spouse’s benefits could also eventually increase the other spouse’s survivors benefits.

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