Should you claim your social security benefits right now or wait?

When to apply for benefits is a life-altering choice. Whether you plan to retire soon or have already done so, you’ll need to decide on your Social Security benefits. When you stop working, you are not automatically entitled to unemployment payments. If you are between 62 and 70, you can begin receiving payments.

When is the appropriate time for you to start receiving benefits? What follows are some things to consider as you weigh your options and make this crucial decision. Knowing your full retirement age (FRA) and how it corresponds to your current age is vital when filing for Social Security.

The SSA determines your official retirement age. Based on your birth date, here are a few things to think about:

  • If your birthday falls between 1943-1954, your age is 66.
  • If born in 1955, you would be 66 years old and two months.
  • If you were born in 1956, your age is 66 years and four months.
  • If you were born in 1957, your age is 66 and six months.
  • If you were born in 1958, your age is 66 years and eight months.

According to the Gregorian calendar, if you were born in 1959, you would be 66 years and ten months old. Your standard benefit, commonly known as your primary insurance amount (PIA), becomes payable to you at this age. If you consider the 35 highest earning years of your life, your PIA will be a percentage of your average salary throughout that period. However, only some people start collecting benefits at their FRA.

Know that your standard benefit will be reduced by 5/9 of 1% for up to 36 months if you file your claim early. After then, reductions in benefits are 5/12 of 1% per month. Put another way. If your FRA is 67, the penalty will cut your monthly income by 30%.

However, if you wait to file your claim until beyond your FRA, you might accrue delayed filing credits that can raise your payout permanently until age 70. If you work past your FRA, your pension will grow by 2/3 of 1% per month, for 8% more per year.

Do you have any other forms of savings?

Social Security benefits will replace only around 40% of your pre-retirement income. This necessitates having a backup plan in place before filing for benefits. You should only start Social Security if you have figured out how much money you’ll have from savings or a pension.

It is feasible to continue working while receiving Social Security or other retirement benefits. One dollar of Social Security benefits will be withheld for every two dollars earned in 2022 over $19,560 if the recipient has not reached FRA and will not reach FRA during the year. You’ll lose $1 for every $3 you make above $51,960 if you plan to go FRA during the year but continue working.

If you need to work to augment your benefits and your earnings are high enough, claiming them is not a good idea.

How is your physical condition right now?

Your health is a significant factor when selecting how frequently to check in. Putting off filing for benefits means forgoing paychecks to which you are legally entitled in the hopes that you will be able to make up the difference at a later date.

However, if your health is poor, you might need to live longer to collect on those benefits. To maximize the total value of your advantages over your lifetime, it makes sense to apply for Social Security as soon as possible in those situations.

Is your partner in on how you feel?

Finally, consider a survivor benefit; your spouse may continue to receive payments from your pension or other sources if you are the higher earner. Even if these are greater than their retirement benefits, your spouse will have less money each month if you took them early and were penalized for them.

You can maximize your benefits and any survivor benefits your spouse receives by filing early or delaying your claim according to the information provided above.

Contact Information:
Email: rick@andrikfinancial.com
Phone: 9568933225

Bio:
Rick Viader is a Federal Retirement Consultant that uses proven strategies to help federal employees achieve their financial goals and make sure they receive all the benefits they worked so hard to achieve.

In helping federal employees, Rick has seen the need to offer retirement plan coaching where Human Resources departments either could not or were not able to assist. For almost 14 years, Rick has specialized in using federal government benefits and retirement systems to maximize retirement incomes.

His goals are to guide federal employees to achieve their financial goals while maximizing their retirement incomes.

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