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Is 2022 Your Year to Claim Social Security? Find Out in 3 Questions

By Christy Bieber – Jan 11, 2022 at 8:20AM

Key Points

  • Social Security benefits are affected by the decisions you make.
  • You need to understand the rules before claiming benefits.
  • Among other things, you should know how your age affects your payments.

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Before you start your checks, be sure to answer all three.

Claiming Social Security benefits is a decision that's hard to undo, and it's also a choice that will affect your financial situation for the rest of your life.

Before you take the leap and file for your Social Security checks to begin in 2022, here are three questions you should ask yourself to make sure you're really ready.

Two adults sitting together by the water.

Image source: Getty Images.

1. How old will you be?

You must be at least 62 years old to be eligible to claim Social Security retirement benefits. If you won't reach that age by the end of this year, you won't be able to get your first check in 2022.

Even if you will be 62, be aware that starting benefits before age 70 will result in a check that's smaller than it might otherwise be. Social Security recipients are entitled to their standard benefit at a specific age called full retirement age (FRA). That's between age 66 and four months to age 67, depending when you were born.

Although you can start your checks before FRA, doing so means reducing the amount you receive because of early filing penalties that apply on a monthly basis. By contrast, delaying FRA until 70 entitles you to earn delayed retirement credits that raise your standard benefit.

If you won't turn 70 in 2022, take the time to think about whether it might make sense for you to wait to start your benefits in order to maximize this source of lifetime income. 

2. Do you know how much income your benefits will provide?

Regardless of how old you are or whether you maximize your monthly Social Security income, you will end up with a monthly check you cannot live on without other income. This is a sad reality many future retirees are unaware of because they incorrectly expect Social Security benefits to provide a livable amount of money. 

The reality is, the benefits will replace only about 40% of pre-retirement income, and a 60% pay cut is almost impossible for the average person to absorb. So be sure you know how much your monthly Social Security checks will be so you aren't faced with shockingly small checks once you've claimed them. 

3. Will you have enough money to live on?

Since Social Security benefits won't provide enough to live on, you need money from other sources. Exactly how much depends on what your expenses are likely to be as a retiree.

Before you claim Social Security in 2022, devise a sample monthly retirement budget. Don't forget costs such as health care, as well as travel if you plan to do more of it once you're no longer tied to your job. 

Then see how much of your expenses Social Security will cover and determine if your savings can make up the shortfall between your expenditures and retirement benefits. If you would be forced to withdraw so much from savings to supplement Social Security that you'd risk draining your nest egg, you probably shouldn't claim Social Security until you've done more to develop other income sources. 

Understanding the role benefits play, and understanding the implications of deciding when to claim, can make or break your financial security in your later years. So before you claim your benefits this year, make sure you have detailed answers to each of these three questions. Otherwise, you could be left with some major regrets. 

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