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When Is the Best Time to File for Social Security Benefits?

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Deciding the age at which you will begin to collect Social Security is likely to be a big factor in your retirement planning. Many retirees look forward to the day that they can apply for the benefits they’ve spent their whole careers paying for. However, if you have a substantial nest egg and don’t need the extra funds immediately, it may be in your best interest to wait a few years before claiming your benefits.

What is My Retirement Age?

Americans can choose to start collecting Social Security benefits between the ages of 62 and 70. Many people want to start as soon as possible, which is understandable. After all, you’ve spent your career paying into Social Security, and it makes sense to take advantage of those benefits. However, just because you can start collecting at age 62 doesn’t always mean it’s the best choice. This is because, for some people, 62 is not actually considered your full retirement age. If you were born after 1960, your full retirement age is 67. If you were born in the 1950s, your retirement age is around 66. These numbers have been adjusted over time in an effort to compensate for an increase in average life expectancy.

You need to wait until you reach your full retirement age to apply for social security if you want to receive your full benefits. However, if you wait past your full retirement age, you’ll generally receive a Delayed Retirement Credit that can slightly increase the amount of benefits you receive. The longer you wait after your full retirement age—up until you reach age 70—the higher your benefit will likely become. You can find more detailed information on Delayed Retirement Credits on the Social Security Administration’s website.

Collecting Social Security Before — or After — Your Full Retirement Age

If you begin collecting Social Security at age 62 and your full retirement age is 66, the check you receive will be about one-quarter less than the amount you would have received at full retirement age. If you are the sole breadwinner in your household, your spouse could be negatively affected as well. If you begin collecting before your full retirement age, the amount of money your spouse would receive after your death decreases.

By contrast, the longer you wait to start claiming Social Security, the greater the rewards. For example, if you wait until your full retirement age of 66, you get the full amount. Hanging on until age 70, however, generally increases your check by one-third.

Factors That Affect Social Security Benefits

The math seems to say that everyone should wait until age 70 to reap the best benefits, but this isn’t always the case. There are times when it might make sense to start collecting earlier. If, for example, you are in poor health or if the family breadwinner is ill and can no longer work, collecting before your full retirement age could help prevent debt from mounting up.

Your marital status also plays a factor. If you’re single and in poor health, you could end up using your savings to pay for medical bills between the ages of 66 and 70. In this case, you might be better off collecting Social Security benefits at a lower rate than holding out for the higher payments you’d receive at age 70.

If, however, you’re single, in good health and either still working or have plenty of savings, consider waiting until age 70 in order to benefit from the higher payments.

With married couples, it could be best for the spouse who earns the most money to hold off until 70, while the spouse who makes less starts collecting at 62. This approach will ensure that when one of you passes away, the surviving spouse will receive the higher benefits—generally the amount their spouse would have received at age 70, even if the spouse died before that age.

For more help with retirement planning, consider contacting a Certified Financial Planner. They can help you ensure you’re maximizing your Social Security benefits and answer any questions you have about your other assets.

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