When Should I Apply for Retirement Benefits?

Planning for your retirement takes a lot of careful consideration if you want to live comfortably. One way to prepare is to look at what retirement benefits you may be eligible for through Social Security. Once you become eligible to receive Social Security benefits, you may want to decide if you wish to apply early or wait until you reach full retirement age.

Social Security is a federal program, but the laws of your state may impact how your retirement income is treated through income tax and exemptions. If you want to maximize your benefits, you can contact an older adult law attorney in your state for legal advice.

What Are Social Security Benefits?

The Social Security program is a federal government-backed insurance program designed to provide benefits to:

• Senior citizens who are aged 62 and older;
• People who are disabled or blind; and
• Survivors and other beneficiaries of workers who’ve passed away.

Social Security Taxes

Most people are aware of the Social Security taxes deducted from every paycheck. Those are part of the payroll taxes you have been paying for your entire working life. These taxes make you eligible for Social Security benefits when you reach a certain age. How much you qualify for is determined by the Social Security system credits you earn throughout your work history. Eligibility requirements for retirement benefits include:

• At least ten years of work (40 credits)
• At least 62 years of age

You may also be eligible if you become disabled or are the child, spouse, ex-spouse, or surviving spouse of a qualified worker.

Applying for Retirement Benefits

Regardless of the age you plan to begin receiving retirement benefit payments, know that your first payment should arrive about three months after filing for enrollment. You can file your retirement application for your Social Security benefits by phone or online through the Social Security website.

Social Security is run through the Social Security Administration (SSA). If you want more information about how to apply for Social Security benefits, you can check out the Social Security SSA.gov website or visit your local Social Security Office.

Can I Apply Early for Social Security?

When you apply for your retirement benefits plays into how much you collect. If you sign up at the minimum age of 62, you won’t receive as much as you would if you held out until your full retirement age.

The Social Security program allows you to begin collecting payments as early as your 62nd birthday in most cases. However, those who choose to start receiving Social Security early at 62 will get 25 percent less for the life of their monthly payments than if they were to wait until full retirement age.

Of course, whether you can wait to claim your social security benefits will depend entirely on your unique financial situation. If it’s financially possible, you could maximize your retirement benefits by beginning to collect retirement payments later rather than sooner.

What Is the Widower Exception?

Social Security requirements mean that most retiring seniors can only claim their benefits once they turn 62. However, the program offers an exception for widowers and widows, known as survivor benefits. Widowers and widows may begin collecting spousal benefits at age 60.

What Is the Full Retirement Age?

The normal retirement age has changed over time. Full retirement age will vary depending on the year you were born. For anyone born from 1960 on, the full retirement age is 67. However, if you continue with delayed retirement, your benefits can continue to increase. For anyone born in 1943 or later, delayed retirement has a yearly rate increase of 8.0%. The benefit increase peaks at age 70, even if the person continues to delay benefits.

How Can I Maximize Retirement Benefits?

For example, you are eligible for a monthly Social Security payment of $1,000 per month at full retirement age. However, the benefit amount you receive depends on when you begin your retirement benefits. If your base retirement benefit is $1,000, but you begin claiming benefits at age 62, your monthly payment would go down to $750 for life.

However, if you chose to wait until after your full retirement age, you would receive an eight percent increase for every year you delayed after full retirement age, up to the maximum available at age 70. If your benefits at full retirement age of 67 are $1,000, waiting until age 70 would mean an increased monthly benefit amount of $1,240.

Your Benefit Payments

How does the Social Security office determine your monthly benefit payment amount? Generally, they will average your highest 35 years of income, adjusting for inflation. The amount you receive every month once payments begin will depend on when you apply, how long you worked, and how much you made.

What Documents Do I Need to Apply?

You’re going to need quite a few documents on hand, no matter how you choose to file for your benefit payments. These documents include, but are not limited to:

• Your original birth certificate, a copy certified by the issuing agency, or other proof of your age.
• W-2 or self-employment tax documents
• Military service paperwork
• Naturalization or citizenship documents
• Social Security card or record of your number

As part of the application process, additional information includes:

• Date of birth
• Place of birth
• Employer’s information
• Bank account routing number for direct deposit

You also will be asked to provide information on former or current spouses during the filing process.

Can I Collect Benefits and Keep Working?

What if you are ready to begin collecting on your benefits but are not yet ready to retire from the workforce? You may want to keep your private health insurance through your job instead of relying solely on Medicare. You may also enjoy your job and want to stay active in the workforce.

The good news is that you do not have to wait for retirement to begin collecting payments as long as you have reached the minimum age of 62. However, depending on your work history, age, and income, if you wait longer to retire, your monthly payment could be higher until you max out at age 70.

What Other Steps Should I Consider Near Retirement?

As you think about retirement, it is also an excellent time to evaluate your estate plan. Everyone should have an estate plan to help protect their loved ones. You can contact an estate planning attorney for help with planning for the future. Sometimes, low-cost do-it-yourself (DIY) wills, living wills, and powers of attorney are possible and can be found on our companion site, FindLaw.com.

Planning for Retirement With a Professional

Retirement planning can be complicated, and working with an older adult law attorney or personal finance professional may help you address your needs while you prepare for your future. An attorney can help retirees with other retirement planning needs, including disability benefits, early retirement planning, and getting the most from your Social Security retirement benefits.