There are several points in time that are important to your Social Security. When do you first become eligible for benefits? When do you have to start collecting benefits? And when should you fill out your application for Social Security? Here are these important Social Security dates and more, as explained by our contributing writers.
Selena Maranjian: A key Social Security-related date to know is your "full" retirement age. Obviously, most of us may not know the exact age at which we'll retire. It may be when we want to, or if we have to keep working to make more money, it may be later than we want. The Social Security Administration, though, has a precise retirement age calculated for you. It's the age at which you can start collecting your full, unreduced Social Security benefits.
The full retirement age used to be 65 for everyone, but in 1983, Congress set in motion an increase to 67. Those born in 1937 or in earlier years (in other words, those roughly 78 or older in 2015) still have the full retirement age of 65. For those born between 1943 and 1954 (between the ages of about 61 and 72 this year), it's 66. And for those of us born in 1960 or later (those aged about 55 or younger), it's 67. If you're born in between those times, between 1938 and 1942 or between 1955 and 1959, your full retirement age will be a bit more complicated. For example, those born in 1958 have a full retirement age of 66 and 8 months. The Social Security website offers the full scoop.
Your full retirement age matters because you don't have to settle for your regularly scheduled "full" benefits. You can start collecting benefits as early as age 62 or as late as age 70. Your benefits will be roughly 8% higher for each year you delay collecting after your full retirement age until age 70, or lower if you start collecting early. Thus, if your full retirement age is 67 and you delay starting to collect for three years, until you hit age 70, you can increase your monthly benefit check by about 24%! That's a meaningful difference, but you miss out on many months of benefits by delaying, and the Social Security Administration points out that the system is designed to give you approximately the same value no matter when you opt to start collecting. Still, these options give you the chance to be strategic about Social Security, to maximize your benefits.
Matt Frankel: As Selena pointed out, you can begin to collect Social Security benefits anytime between the ages of 62 and 70. Another important date to know is when you should apply to make sure your benefits start when you want to.
Fortunately, Social Security doesn't have a strict deadline structure you have to meet. You can apply for benefits in the same month you wish to start receiving them, or as many as four months in advance. If you want to collect benefits as early as possible (age 62), you can apply as soon as you're 61 years and nine months old.
There is another important thing to keep in mind that relates to the timing of benefits. Social Security benefits are paid in the month after they're due. In other words, January's benefit is paid out in February. So if you want to receive your first check in January, you'll need to apply for your benefits to begin in December. Keep this in mind to make sure there's no break in income between when you retire and when you start getting your benefit.
Jason Hall: Many Americans will decide to wait past their full retirement age to pump up their monthly benefit with "delayed retirement credits".
The amount your benefit increases each year past full retirement age depends on when you were born, but it's capped at age 70. In other words, if you delay your benefit beyond 70, you're just giving away money.
Here's a table, compliments of the Social Security Administration, with a breakdown of the rate of increase by year of birth:
Anyone who's yet to reach 70 would increase the eventual benefit by 8% for every year it's delayed, up to 70. If you have a family health and life-expectancy history that indicates you may live well into your 80s or beyond, then it may make sense to delay your benefit and get a larger one.
If that's the case for you, all you need to do is remember your 70th birthday and start collecting your benefit that month.
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