According to a survey from Empower Institute, nearly half (47%) of adults 45 and over said deciding when to claim Social Security benefits was the biggest retirement decision they faced. .
Social Security benefits can have a huge impact on your retirement, so it’s important to choose wisely when deciding your claim age. While everyone’s circumstances are different, here are three signs that you are ready to start getting benefits right now.
1. You have checked your estimated benefit amount
You don’t have to wait until you start receiving Social Security to know how much you will get. In fact, you can easily check your benefit amount online by creating a mySocialSecurity account.
By checking your online statement, you can see your estimated benefit amount based on actual earnings over your career. You should check your benefit amount before you start claiming, just to make sure your expectations are realistic. If you check your statement and find that you won’t get as much as you think you are, you may need a little more preparation before you start asking.
2. You understand how full retirement age affects your benefits
Your full retirement age (FRA) is the age at which you will receive 100% of your benefit amount. If you were born in:
- 1959 (and will turn 62 by 2021): Your FRA is 66 and 10 months
- 1960 and up: Your FRA is 67 years
- Before 1960: Your FRA was 66 or 66 and a certain number of months, depending on the year you were born
If you start claiming your FRA in advance, your benefits will be reduced by up to 30%. These cuts are also permanent, meaning you won’t see your benefit amount increase when you reach your FRA. That doesn’t necessarily mean you should ask early, but make sure you know how it will affect the size of your monthly checks.
Additionally, if you defer claiming benefits after your FRA (until age 70), you will receive your full benefit amount plus up to 32% per month. This benefit increase is also permanent, so if you postpone benefits, you will receive a larger check for the rest of your life.
3. You have created a strategy with your spouse
If both you and your spouse are eligible for benefits, you should decide when you both want to claim, to maximize your monthly income. For example, you may decide that the spouse with the higher income should delay benefits, while the lower-income spouse will claim early, or you can both decide to claim early or delay.
Also, when one spouse dies, the other may qualify to receive the full deceased’s benefit in survivor benefits. If you have reason to believe that your spouse with the higher income won’t live as long as the other, it may be wise to delay benefits so that your surviving spouse can take advantage of the larger expenses. later in life.
Social Security benefits are an integral part of the retirement puzzle, so it’s important to make sure you’ve done your research before you start claiming. And if you’ve already done these three, it’s a good sign that you’re ready to start participating in Social Security.