Have You Considered When To Take Your Social Security Benefits?

Social Security Benefits Image

Deciding when to apply for your Social Security benefits is not as simple as it may seem. For the average retiree, Social Security consists of a large portion of his or her income so it’s important for you to take time and ideally consult a retirement planning advisor who will help you make more appropriate decisions regarding when you should start collecting your benefits.

Age Restrictions

You also need to be aware that there are restrictions as to when you can apply and when you can receive your benefits. For example, if you are not at least 61 years old and 9 months of age you cannot apply. What’s more, you won’t receive your benefits until your 62nd birthday and the earliest date you can apply is four months before you want your benefits to start.

Best Age To Apply

You also need to take into consideration the best ways to potentially maximize the amount you will be receiving. There is no ideal time or age to apply for your Social Security benefits – it is normally based on individual and family situations since the monthly benefit amount can vary significantly based on the age when you start receiving benefits.

The Amount You Receive

Keep in mind that the monthly amount of the Social Security benefits you receive when you first get your benefits establishes the base amount you will be receiving for the remainder of your life. Therefore, if you apply prior to your full retirement age, you will receive a smaller but for a longer period of time. On the other hand, if you apply at full retirement age or later, you will receive a larger monthly benefit but for a shorter period of time. Your monthly benefits are based on your highest 35 years of earnings, which are adjusted for inflation, and the age you start collecting benefits. Hence, the older you are when applying for Social Security and the more money you earn will result in higher monthly payments.

Full Retirement

Many people believe that full retirement is at the age of 65 which is correct if you were born in 1937 or earlier. Actually, full retirement age ranges from 66 to 67 depending on the year you were born. It’s important to note that if you claim your benefits before your full retirement age, you will end up with a permanent decrease in monthly benefits. However, if you claim after full retirement it leads to a permanent increase.

A Retirement Plan is a MUST

Having a solid and realistic retirement plan is absolutely necessary. Once you calculate your monthly benefits you need to take into consideration any sources of income and current expenses. By budgeting wisely you may be able to meet your needs. Therefore it would be a good idea to consult a trusted financial advisor who will be able to take into account all your current and future financial position and the expenses you will incur.

Don’t Forget Your Loans

Unfortunately, nowadays, many individuals enter retirement years and still need to make mortgage payments or pay off loans. It is also a possibility that housing and health costs may increase.

You Need To Consider Your Spouse

If you are married when you decide to claim your Social Security benefits, you need to take into account how your spouse’s benefits will be affected after you die. This is an important consideration since the surviving spouse receives the higher of the two spouses’ benefits. Consequently, it may be advisable for the higher-earning spouse to claim Social Security benefits at or after full retirement age in order to get the full or highest potential benefits.

Retirement can be one of the most rewarding parts of our lives if we plan wisely. For more information about retirement planning and when to claim your Social Security benefits, please use our online contact form or call us at (888) 671-7891 today. Our team of advisors will work with you to develop a customized financial plan specific to your personal goals!

Securities and financial planning offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Multop Financial is not affiliated with LPL Financial, and offers tax and accounting services separate and apart from LPL Financial.