Eager To Claim Your Social Security Benefits?

Social security fundAs you probably are aware, age 62 is when qualified individuals are first eligible to file for their Social Security benefits. 

However, did you know that claiming benefits early decreases your monthly paychecks and overall lifetime earnings?

If you wait until full retirement age (usually either 66 or 67, based on when you were born), you’ll receive 100% of the benefit available to you based on your personal work record. If you wait until age 70, your retirement benefits will also be even more, because delaying past full retirement age lets your benefits grow by 8% per year, until you reach that age.

In effect, delaying your claim until 70 could bring your benefit amount to 132%. It’s usually best to hold off on claiming as long as you can.

Usually, it only makes sense to claim your benefits early in limited circumstances. For instance, if you're single and you're terminally ill and you know you're not going to live very long, you might go ahead and file early.  However, in most other situations, it does not make sense to claim early. Even if you know you won't live a long time, if you're married, claiming early could reduce the number of benefits your spouse will have access to, once you're gone.

Survivor benefits are determined by the age a person dies and the amount of Social Security credits they had accrued. If you wait to claim benefits, you’ll have more credits and a larger benefit to pass on when you die.  However, the amount survivors can access, also depends on when they claim the benefit.

A surviving spouse can file for widow or widower benefits starting at age 60. However, that benefit amount will be reduced. Instead, if that person waits until their full retirement age, they’ll be eligible to receive 100% of their spouse's benefit amount.

Those eligible for survivor benefits can elect to claim those funds or their own retirement benefits if they’re eligible for them. Therefore, they could take the survivor benefit and let their own benefit grow up to age 70.

Regardless of your situation, delaying as long as you can to claim Social Security will also help you with annual cost-of-living adjustments, because they will be based on that higher benefit amount.

Reference: CNBC (June 19, 2018) “This is when it makes sense to claim Social Security early”


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