When to File for Social Security
Don’t know much about Social Security? You’re definitely not alone, said Kevin McCor mally in Kiplinger.com. MassMutual Life Insurance Company recently tested 1,500 Americans on 10 basic true/false facts about the federal retirement program. “The results were not encouraging.” More than 70 percent of respondents flunked, and just one person answered every question correctly. These weren’t trick questions, either.
Asked to identify the full retirement age—when full benefits can be collected—more than two-thirds of respondents answered 65. That was once true—but Congress abandoned it 30 years ago. Today, it’s 66, and for those born in 1960 or later, it’s 67. Only 57 percent of respondents knew that the age at which you claim benefits affects the size of your checks. When to start taking Social Security benefits is “one of the most important financial decisions” most of us will make, said Allan Sloan in The Washington Post. If you or a spouse has worked at least 10 years, you can start drawing benefits at any time between the ages of 62 and 70. “The longer you wait to start, the bigger your monthly benefit.” Today, if you begin collecting at the full retirement age, you get 100 percent of your benefit. It rises about 8 percent each year you wait and shrinks by about that much for starting early, so at 62, you get 75 percent of your monthly benefit, and at 70, you get 132 percent.
“Delaying Social Security is often wise for singles,” said Ilana Polyak in CNBC.com. “It’s not so straightforward for married couples,” who are confronted with more than 8,000 different ways they might claim Social Security benefits. Couples with a big earnings discrepancy between them should consider the “file and suspend strategy.” The higher-earning spouse files for his or her benefit at full retirement age, then immediately suspends it to allow the benefit to grow. The other spouse then claims a spousal benefit, which is half of the filer’s benefit. This allows couples to collect partial benefits without waiting and take advantage of the full amount later. There are many, many exceptions to all this “well-intentioned” Social Security advice, said Philip Moeller in Time.com. While you might know that the earliest age retirement benefits start is 62, there are benefits that can start sooner. Survivors’ benefits may be taken as young as age 60. Disability insurance benefits can be triggered at any age. The Social Security Administration provides a questionnaire on its website to help people understand which benefits they are entitled to. Just remember, “this is not a one-size-fits-all program.”
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