Deciding when to file for Social Security benefits is one of the most significant retirement decisions, so make it wisely.
It might cost you later if you rush it and file your claim before you’re ready. However, if you wait too long to file for benefits, you may regret not claiming sooner. There’s no one-size-fits-all answer for when to file a claim. However, there are a few indicators that you’ve done your research and are ready to apply for Social Security right now.
1. Your savings are in good condition.
Social Security benefits are intended to replace only around 40% of your pre-retirement income. That implies that you’ll need to supplement your income unless you can dramatically lower your costs once you retire.
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If you don’t know how much to save or if you expect Social Security to be your primary source of income, you should postpone your claim for the time being.
2. You understand how your age affects your benefit amount.
The age at which you claim your benefits directly impacts how much you get each month. If you file a claim at your full retirement age (FRA), which is 66, 66, and a few months, or 67, depending on the year you were born, you’ll get the entire benefit amount based on your work record.
You’ll get a reduced amount if you file your claim before your FRA (as early as 62). Delaying benefits will give you a bonus for each month you wait until you reach 70. In theory, you can postpone benefits over 70, but that won’t result in any additional money per month.
The age at which you begin claiming is a personal choice, and there is no right or wrong answer. However, knowing how that age would impact your monthly payments can make it easier to plan for retirement.
3. You and your husband have developed a plan.
If you’re married and your spouse is also eligible for Social Security, you should plan when each of you will file a claim.
You may choose to file simultaneously, regardless of your age. Or perhaps one of you will file your claim first while the other waits. That way, you may get some additional cash sooner in retirement while still benefiting from the larger amounts you’ll receive by deferring.
Also, while it may be unpleasant to ponder, it’s essential to examine both of your lifespans. If one spouse dies, the surviving spouse may be entitled to the deceased spouse’s entire benefit amount in survivors benefits. If you have reason to expect that one of you will outlast the other, you should consider how survivors’ benefits fit your strategy.
It might be challenging to choose when to collect Social Security, but the more you plan ahead of time, the better off you’ll be in retirement. If you’ve thought about these three considerations, you might be ready to file for Social Security as soon as possible.
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M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].
