Author: Emily Tierney

Deciding when to start receiving Social Security benefits is a big decision! You can start receiving Social Security retirement benefits as young as age 62 and as late as age 70.  If you start receiving Social Security benefits before your full retirement age, your benefit is reduced.  If you wait to receive benefits after your full retirement age, your benefit increases each year you wait.  With all of these factors, how do you know what’s best for you?

This decision is a big one because for many retired Americans, Social Security is their main source of income¹.  It’s important to get the Social Security retirement benefit that works best for you.  Why?   Once you apply for Social Security retirement benefits, your benefit is usually locked in for life. People are living longer than ever now and may be living off of their Social Security retirement benefit for twenty-five or more years, so it’s important they make a good decision on when they begin to receive that benefit.

Taking Early Social Security Benefits vs. Delaying

When you receive early Social Security retirement benefits, that means you begin receiving benefits before your full retirement age. You can begin receiving benefits as early as age 62, but your benefit is reduced depending on how early you started.  This is a permanent reduction in your benefit.  Additionally, if you receive an early Social Security retirement benefit, you can’t make over $15,720² in wages.  In other words, you can’t work part-time making $20,000 a year and receive early Social Security retirement benefits without those benefits being penalized for making over $15,720.

If instead you want to wait to get the largest monthly benefit, you can wait until up to age 70 to begin receiving retirement benefits. If you wait until age 70 to begin drawing your Social Security benefit, each year after your full retirement age, your benefit increases about 8%³.

Does your decision impact your spouse?

Yes! Your spouse may be eligible for Social Security retirement benefits based on your work record.  How?  Spouses who have not worked or who have lower earnings may be able to get a spousal benefit based on the retired worker’s benefit (if it’s higher than their own benefit).  This means the spouse can’t get spousal benefits until the retired worker files for retirement benefits.  Spouses get a reduced benefit if they begin before full retirement age.

Other Considerations

Some other things to think about when getting ready to apply for retirement benefits:

• If you are done working and if not, how your earnings affect your Social Security retirement benefit
• How your Social Security benefits will affect your income tax situation
• Your overall cash flow in retirement and how Social Security fits in
• Your feelings about the longevity of the Social Security program

The Social Security Administation has an easy-to-use website with lots of information in different languages, frequently asked questions, publications, calculators, online services, and more. If you have questions about your Social Security benefits, consider contacting your local Social Security office or visiting SSA.gov.

 

Citations

1. “Facts & Figures About Social Security”. Social Security Administration, 2015, https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2015/fast_facts15.html#contributions. Accessed 10 August 2016.
2. “How Work Affects Your Benefits”. Social Security Administration, 2016, https://www.ssa.gov/pubs/EN-05-10069.pdf. Accessed 10 August 2016
3. “When To Start Receiving Retirement Benefits. Social Security Administration, 2016, https://www.ssa.gov/pubs/EN-05-10147.pdf. Accessed 10 August 2016

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