Few topics are more controversial among financial planners than when you should claim your hard-earned Social Security benefits. Sometimes, claiming as soon as you possibly can is a smart move, while other times, waiting until the last possible moment can pay off for you and your loved ones. Somewhere in between is what the Social Security Administration considers to be "on time," but is it the right time for you? You'll learn about three reasons it might be, but first, let's look more closely at what on time really means.

When is "on time" for Social Security?

The SSA looks at the definition of full retirement age to determine whether someone is filing on time. Your full retirement age depends on your year of birth, and you'll find a quick guide in the chart below.

If You Were Born In...

Then Your Full Retirement Age Is:

1943 to 1954

66

1955

66 and 2 months

1956

66 and 4 months

1957

66 and 6 months

1958

66 and 8 months

1959

66 and 10 months

1960 or after

67

Data source: Social Security Administration.

The SSA calculates your baseline retirement benefit on the assumption that you'll retire at your full retirement age. Workers who claim benefits before their full retirement age get less than their baseline amount, while those who claim benefits after full retirement age can qualify for delayed retirement credits to boost their monthly payouts.

Even though many people choose not to wait until full retirement age before claiming Social Security, there are some good reasons to hold off, such as the three below.

1. If you're still working, benefit forfeiture only applies to those who take benefits before full retirement age.

Those who take early Social Security benefits while they're still working can sometimes forfeit some of their benefits if they make too much money. For 2017, if you make more than $16,920 and are younger than full retirement age all year, you'll lose $1 in annual benefits for every $2 you earn above the limit. If you do hit full retirement age during the year, a higher earnings limit of $44,880 applies, and you lose $1 for every $3 above the threshold. The corresponding income limits for 2018 will be $17,040 and $45,360 respectively.

Once you reach full retirement age, you can no longer lose Social Security benefits even if you still work. Instead, you can earn income as long as you want and keep all of your Social Security payments. Waiting until full retirement age can avoid a big hassle.

Older couple in front of a backdrop that includes Social Security card with picture of George Washington from $1 bill.

Image source: Getty Images.

2. Coordinating family benefits can be easier for some couples.

If you're married, when you claim affects when your spouse can claim. When one member of a couple doesn't work, spousal and survivor benefits become the only source of retirement income from Social Security. Your spouse can't claim spousal benefits on your work record until you file. So if your spouse is four to five years younger than you are, then things will time out perfectly in that your spouse will be able to claim early benefits just when you reach full retirement age.

In addition, if you claim at full retirement age, your spouse will get full survivor benefits after your death. Claim early, and not only do you get smaller monthly payments during your lifetime, but your spouse will receive smaller survivor benefits thereafter. That can be a factor not only with one-earner families but also with couples who can use both their own retirement benefits and potential survivor benefits to maximize their total take from the program.

3. It might be the best way to maximize your total retirement income.

Conversely, some retirees have multiple sources of income, but some of them can affect your Social Security. For instance, if you're eligible for both Social Security benefits as a spouse as well as benefits from your own work that made you eligible a public pension, the Government Pension Offset can apply to cut your Social Security by up to two-thirds of your government pension.

That can wipe out your entire Social Security, especially if you claim early. For some, waiting until full retirement age will be the best way to get at least something from Social Security -- if by doing so, your Social Security benefit grows enough not to get entirely taken back by the offset.

Similarly, the Windfall Elimination Provision can cost you Social Security benefits if you had a career in which some but not all of your earnings were subject to Social Security payroll tax. As much as $442.50 can be taken away in 2017, although the maximum that applies to you depends on how long you worked in a payroll-tax paying job.

Be smart with Social Security

It's hard to know exactly when is best to file for Social Security. Looking at all your options will help you make the best choice, whether it's right on time, earlier, or later.

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