Millions of seniors today collect a monthly benefit from Social Security. And for many older Americans, those benefits are instrumental in helping them stay afloat financially.
Now ideally, you’ll kick off retirement with a nice amount of savings so that Social Security doesn’t have to constitute your only, or even your primary, source of senior income. But even so, it’s important to make the most of the benefits you’re entitled to. And do so, you’ll first need to know these essential rules.
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1. You’re only entitled to your full monthly once full retirement age arrives
You may have heard that you’re able to collect Social Security once you reach age 62. That’s totally true. But if you want the full monthly benefit you’re entitled to based on your personal earnings history, then you’ll need to wait until full retirement age, or FRA, to sign up.
FRA hinges on your year of birth, and you can consult this table to see what your FRA looks like:
|
Year of Birth |
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 or later |
67 |
Data source: Social Security Administration.
Keep in mind that if you’re married, you and your spouse might each have a different FRA, and that should inform your respective claiming decisions.
2. A delayed filing will give you a larger monthly benefit for life
There’s no rule stating that you have to sign up for Social Security once your FRA arrives. Rather, you’re allowed to delay your filing indefinitely.
However, it’s a good idea to sign up for Social Security by the time you turn 70. For each year you delay your filing past FRA and up until the age of 70, your benefits will grow 8%. But beyond age 70, there’s no financial incentive to delay your claim.
3. Surviving spouses get 100% of what their partners collect
You may be focused on your own financial needs and goals in the context of claiming Social Security, and that’s understandable. But if you’re married, you should know that if your spouse outlives you, they’ll be entitled to survivors benefits from Social Security that are equal to 100% of your monthly benefit. And that might influence your filing choice quite a bit.
You may, for example, be inclined to claim benefits early so you can enjoy that money sooner. But knowing that your spouse might rely on survivors benefits upon your passing might motivate you to wait until FRA or delay your filing so you can leave your life partner with a higher monthly income stream.
In fact, it’s really important to consider your spouse’s financial needs if you’re a lot older than they are, and if you don’t have a particularly large nest egg to fall back on for retirement income. A higher monthly Social Security benefit could help compensate for less savings and help ensure that your spouse doesn’t end up struggling financially in your absence.
Social Security is loaded with rules, and it can be tricky to keep track of each and every one. But these essential rules are ones you definitely shouldn’t gloss over in the course of filing for benefits.
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