It’s normal to eagerly wait to register for Social Security benefits. You’ve spent decades contributing to the program, so naturally you want to reap the rewards. But the rush to sign up can actually cost you in the long run. Before completing this application, take a minute and make sure you know the answers to the three questions below.
1. Why does it matter when I apply for Social Security?
The age at which you claim Social Security determines the size of your monthly checks. You can enroll as early as age 62, but if you want to receive the full benefits your work history entitles you to, you will have to wait until you reach full retirement age (FRA) to enroll. More on that below.
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Each month you delay benefits, your checks increase slightly until you reach 70, when you qualify for your maximum Social Security benefit.
However, that doesn’t mean it’s always best to postpone benefits. You must also consider your life expectancy and financial situation. If you don’t expect to live long or can’t pay your non-Social Security bills, it’s probably wise to register early. Otherwise, if you wait to sign up, you’ll likely get more overall.
2. What is my Full Retirement Age (FRA)?
Your FRA is the age at which you are entitled to your full Social Security benefit based on your work history. The government assigns these to you based on your year of birth. For those born between 1943 and 1954, your FRA is 66. Thereafter, it increases by two months each year until it reaches 67 for adults born in 1960 and later.
Those who register for Social Security immediately at 62 will only receive 70% of their full benefit per check if their FRA is 67, or 75% if their FRA is 66.
Your FRA also affects your maximum benefit. Those with a FRA of 66 will receive 132% of their full benefit per check if they wait until 70 to enroll, while those with a FRA of 67 will only receive 124% of their full benefit per check at 70.
You can find out your FRA and see how much to expect from Social Security at different starting ages by creating an account with My Social Security. When you first create your account, you’ll need to answer a few questions to prove your identity, but once that’s done you can create a password to log in again.
3. How will working while applying for Social Security affect my benefit?
It is possible to apply for Social Security while you are still working, but doing so may result in your benefits being subject to the Social Security income test. This withholds a certain dollar amount from each of your benefit checks if your income exceeds a certain threshold.
If you’re below your FRA throughout 2022, you’ll lose $1 from your checks for every $2 you earn over $19,560. But if you hit your FRA in 2022, you’ll only lose $1 for every $3 you make over $51,960 if you hit that amount before your birthday.
The good news is that the money lost through the income test isn’t lost forever. Once you reach your FRA, the government will recalculate your benefit amount to reflect the money previously withheld. This means that your future check will be slightly larger. But they still won’t be nearly as big as they would have been if you’d just put Social Security up to your FRA without filing an application.
If you don’t need your Social Security benefits to cover your expenses, it may be better to wait until you retire to register than to work and claim at the same time. Delays in payment, even just a few months, can change your checks forever.
Hopefully the above information wasn’t new to you, but if anything surprised you, you should review the suggestions here and think carefully about when to register for Social Security. This may take a little time, but it can help you get the most benefit, so it’s well worth the effort.
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