As you approach the age where you’re eligible for Social Security benefits, it’s important to understand the steps you should take to ensure the process goes smoothly. Planning ahead can help you avoid common pitfalls and maximize your benefits. Here are three things you need to know before filling out your application.
1. Understand How Your Age Affects Your Benefit
The age at which you decide to start claiming Social Security can have a significant impact on how much you receive each month. While you can begin claiming as early as age 62, doing so will come with a penalty. If you claim early, your benefit can be reduced by up to 30%.
Your full retirement age (FRA) is the age at which you can receive your full benefit amount. For most people, this is age 67. However, if you can afford to wait, you can delay claiming benefits until age 70, and for each year you delay, your monthly benefit will increase by 8%. \
This increase continues until you reach age 70, which is the maximum benefit amount you can receive.
To get an accurate idea of how your benefit will change at each age, you can create a “my Social Security” account. This tool provides a detailed estimate of your benefits for every month between age 62 and 70. Before deciding when to apply, it’s important to consider how long you expect to live.
If you anticipate a long life expectancy, delaying your claim could yield a larger lifetime benefit. However, if you expect a shorter life expectancy, claiming early might be the better option for you.
2. Decide When to Apply
When you apply for Social Security is different from when you want your benefits to begin. You can apply up to four months before the date you want to start receiving benefits. It’s a good idea to apply early in case any issues arise with your application, so you can resolve them in time.
Keep in mind that the Social Security Administration (SSA) pays benefits in the month following your eligibility month. So if you plan to begin receiving benefits in January, you won’t actually receive your first check until February. Depending on your birth date, your check may come later in February.
Additionally, if you plan to apply as soon as you turn 62, you need to know that you won’t receive benefits until the entire month of your 62nd birthday. If your birthday is not on the first or second day of the month, you will have to wait until the following month to receive your benefits.
3. Gather the Necessary Documents
To ensure that your Social Security application is processed without delays, make sure you have all the required documentation before applying. For retirement benefits, you will need:
Your Social Security number (or card, if available)
Your original birth certificate or another proof of your age
Proof of U.S. citizenship or lawful alien status
A copy of military service papers if you served before 1968
Your W-2 or self-employment tax returns from the last year
While photocopies of documents are acceptable for most items (except your birth certificate and proof of citizenship), it’s still important to ensure you have all the paperwork ready.
If you’re missing any documents, it’s a good idea to try to gather them well in advance. If you’re struggling to find any information, the SSA can often help with locating the necessary documents.
Bonus: The $23,760 Social Security Bonus Most Retirees Overlook
Many Americans may be unaware of certain “Social Security secrets” that could boost their retirement income. For example, one simple strategy could increase your benefits by as much as $23,760 per year.
Understanding how to maximize your benefits is key to ensuring that your retirement savings and Social Security payments align with your financial goals.
