One of the most important retirement decisions you might ever have to make is when to sign up for Social Security. You're allowed to claim your full monthly benefit based on your personal wage history once you reach full retirement age, or FRA.
FRA depends on the year you were born. If you were born in 1960 or later, your FRA is 67. Otherwise, if you haven't reached it yet, it's 66 and a specific number of months.
Of course, you don't have to file for Social Security at FRA. You're allowed to sign up for benefits beginning at age 62, and you can also delay your filing beyond FRA if you don't need your money right away.
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There are pros and cons to claiming Social Security early, on time, and after FRA. And you'll need to consider those carefully when making your filing decision. But if you're single going into retirement, you may have a much easier time making that call than if you're married. Here's why.
Your decision affects only you
When you only have yourself to worry about in retirement, you can file for Social Security at an age that works for you. But if you have a spouse to think about, your plans may need to change.
Say you're looking at an FRA of 67 but you decide you want to start taking benefits at 62. Maybe you've saved well for retirement and claiming benefits early will allow you to end your career early, travel, and meet other goals. If you only have your own needs to think about, you may decide to collect your benefits as soon as possible, even if it means reducing them by 30% in the process -- for life.
Someone who's married may not have that same option. A married person who expects to pass away well before his or her spouse may not be able to afford a 30% benefit reduction because that would leave the surviving spouse with less money for life (since survivors benefits are equal to the monthly amount collected while the Social Security recipient was still living).
Similarly, you may decide that you'd like to delay your filing until age 70 to squeeze more money out of Social Security. For each year you delay your filing past FRA, your benefits grow 8%, up until the age of 70. That decision could work out well for you. But someone who's married and delays Social Security makes it so that his or her spouse can't claim a spousal benefit for a longer period of time.
Of course, married couples do have certain advantages when it comes to Social Security. If both members of a given couple are entitled to a benefit of their own, they can coordinate their filings in a manner that works to their advantage.
But at the end of the day, the decision to sign up for Social Security may be an easier one to make if you only have yourself to think about. And that's something that could make it a lot easier when the time comes.
