3 Reasons to File for Social Security on Time
You don't get a say in how much you pay into Social Security during your working years, but you do have some say in how much you get out of it. The age you begin taking Social Security affects how much you'll receive per month, so you have to give some thought to when to start claiming benefits.
You become eligible for benefits at 62, but you can delay retirement benefits up to 70 in order to get larger checks. There are no right or wrong answers, but if you aren't sure what to choose, filing at your full retirement age is a safe bet.
Image source: Getty Images.
What does it mean to file for Social Security "on time"?
Before we get into the benefits of filing at your full retirement age (FRA), it's helpful to discuss what that actually means. The Social Security Administration assigns everyone a FRA based on the year you're born. Here's where things currently stand:
| Birth Year | Full Retirement Age |
|---|---|
| 1943-1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 and later | 67 |
Source: Social Security Administration.
If you want the full benefit you're entitled to based on your work record, you must wait until your FRA to begin claiming. You can start as early as 62, but the Social Security Administration will reduce your checks to account for the extra months you're receiving benefits. Claiming benefits at 62 will get you 70% of your scheduled benefit per check if your FRA is 67, or 75% if your FRA is 66.
You can also delay retirement benefits past your FRA and your checks will increase until you hit the maximum benefit at 70. This is 124% of your scheduled benefit per check for an FRA of 67, or 132% for an FRA of 66.
There are pros and cons to starting benefits at any age, but here are a few reasons you should consider choosing the middle ground and filing at your FRA.
1. You're unsure how long you're going to live.
If you don't anticipate living long, it makes sense to start benefits at 62 and claim them while you can. But if you expect to live into your 90s or beyond, delaying benefits until 70 makes the most sense if you can afford to do so because you'll get more money overall. But people can't be sure how long they'll live, and many don't want to take the gamble of delaying benefits and shortchanging themselves.
Starting benefits at your FRA is a nice middle ground. You'll have to cover your living expenses on your own for a few more years, but then you'll get larger checks each month when you do start claiming benefits. The larger checks will also bring larger cost-of-living adjustments (COLAs) that help Social Security keep pace with inflation, so your checks will grow more than they would have if you'd began Social Security at 62.