Seniors have many choices around when to file for Social Security. You could start your checks at 62 if you prefer to get your money as soon as possible, or you could wait until 70 to maximize your monthly benefit.
The decision you make about filing for benefits will impact your finances throughout your retirement and could even affect your spouse after you pass away.
That's why it's so crucial to ensure you know the answers to four key questions before you decide it's time to start collecting retirement income from the Social Security Administration.
1. What's your full retirement age?
Knowing your full retirement age (FRA) is crucial, because your timeline for claiming benefits relative to FRA determines exactly how much your benefits will be. Your primary insurance amount, or standard benefit, is available only if you start getting checks at full retirement age. Unfortunately, many people don't know exactly when that is.
The good news is, it's easy to learn your FRA since you only need to know your birth year. The table below shows you exactly when your full retirement age is, so you'll be able to answer this important Social Security question.
Year of Birth
Full Retirement Age
1943 to 1954
66 and 2 months
66 and 4 months
66 and 6 months
66 and 8 months
66 and 10 months
1960 or later
2. How will your current claim age affect your benefit amount?
As mentioned above, your standard Social Security benefit is the amount you'll get at full retirement age. It's based on a percentage of average monthly earnings, as determined by taking your 35 highest earning years into account (after adjusting them for inflation).
But what happens if you don't claim your benefits right at full retirement age? After all, you can start checks any time after reaching age 62. But before you do, you need to realize you could get more or less than your standard benefit, based on how old you are at the time.
If you file for benefits before FRA, early filing penalties permanently reduce the amount of monthly income. The benefit cut equals 5/9 of 1% for each of the first 36 months you're early, which adds up to a 6.7% annual reduction. If you start checks more than three years early, you'll be looking at a monthly cut of 5/12 of 1% per month, which adds up to a 5% annual cut to benefits. This means someone who starts checks at 62 with an FRA of 67 would face a max 30% reduction.
But if you file after FRA, benefits increase due to earning delayed retirement credits that equal 2/3 of 1% per month. The result is an 8% annual increase in your standard benefit amount. You can only earn delayed retirement credits until 70, though.
3. How does your work affect Social Security?
If you decide to work while getting Social Security, and you haven't hit your full retirement age yet, you need to understand what impact this choice will have on your checks.
If you won't reach full retirement age at any time during the course of the year you are working, you'll end up forfeiting $1 in Social Security benefits for each $2 earned above $19,560 in 2022. And if you will reach FRA in 2022 but plan to work before that time, you will forfeit $1 in benefits for every $3 earned above $51,960. These limits are a little higher than those that applied in 2021, and they should continue to go up in most years.
Knowing them is crucial because you don't want to be surprised when you miss out on Social Security checks, because your paycheck is too high. The good news, though, is eventually your benefit will be recalculated at full retirement age, and your monthly Social Security checks will be a little higher to account for the income forfeited due to working.
4. How will your claiming decision affect your spouse?
Finally, you need to think about how your choice to claim Social Security affects your spouse if you're married. If your husband or wife plans to claim spousal benefits on your work history, you have to claim benefits first, so your choice to delay could make their own claim impossible. On the other hand, if a higher earner gets benefits early, this reduces survivor benefits, which could leave a widow or widower in trouble.
To make sure you don't inadvertently lose out on some Social Security income or doom your spouse to financial disaster, make sure you know the answers to all four of these questions before you even consider filing for your Social Security.
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