Factors to Consider When Deciding When to Apply

Your Age and Full Retirement Age (FRA)

The Social Security Administration (SSA) sets a Full Retirement Age (FRA), which varies depending on your birth year. You can begin receiving Social Security benefits as early as age 62, but your monthly benefits will be reduced if you start before your FRA. If you wait until your FRA, you’ll receive your full benefit amount. Delaying your benefits beyond your FRA can increase your monthly payments up until age 70, at which point your benefits will no longer grow.

Health and Life Expectancy

Your health and family history can influence your decision. If you have health concerns or a family history of a shorter life expectancy, applying for benefits earlier might be beneficial. Conversely, if you’re in good health and expect to live longer, waiting to claim Social Security could result in higher monthly payments over time.

Your Financial Situation

If you need the income right away, applying early might be necessary, even though your benefits will be reduced. However, if you have other sources of income or can afford to wait, delaying your application might help you maximize your monthly benefit amount.

Working While Receiving Social Security

If you choose to start receiving benefits before your FRA and continue to work, your benefits may be temporarily reduced if your income exceeds a certain limit. Once you reach your FRA, the SSA will adjust your benefits to account for the reduction.

Spousal and Survivor Benefits

If you are married, your spouse may be eligible for benefits based on your earnings record. If your spouse’s own benefits are lower, they may receive a higher benefit based on your record. In some cases, it may make sense for one spouse to wait until they are older to maximize the benefit amount.

Impact of Delaying Benefits

Delaying Social Security benefits until after your FRA increases your monthly payments. The SSA offers a Delayed Retirement Credit (DRC), which increases your benefits by a certain percentage each year you wait past your FRA, up until age 70. If you can afford to wait, delaying your claim could provide a significant boost to your monthly benefits.

When Should You Apply?

• At Age 62: If you need the income and are willing to accept a reduced benefit.
• At Full Retirement Age (FRA): If you want to receive your full benefit amount and have no immediate financial need.
• After Full Retirement Age: If you can wait, delaying your application until 70 could increase your monthly benefit significantly.

What Happens if You Wait?

By delaying your application for benefits, you could receive higher monthly payments. However, you will need to weigh the trade-off between waiting for a higher benefit and needing income earlier in life. The decision ultimately depends on your personal financial goals and circumstances.