The decision to file for Social Security is a big one -- huge, actually. Though your benefits are calculated based on your earnings during your 35 highest-paid years in the workforce, the age at which you claim them will determine how much money you collect on a monthly basis for the rest of your life. So, it's important to think through that decision carefully before moving forward. If you're contemplating taking benefits in the coming year, here are a few important things you should know first.

1. The average senior will only collect $1,503 a month

The average Social Security recipient today collects $1,479 a month in benefits. Once 2020's 1.6% cost-of-living adjustment (COLA) goes through, the average senior will be bumped up to $1,503.

However, seniors on Medicare who pay their Part B premiums out of their Social Security benefits won't see their whole raise, because a portion of will go toward an increase in the cost of those premiums. Specifically, the standard monthly premium for Part B is increasing by $9.10. Thus, the typical senior on Medicare may only be looking at $1,494 a month in 2020.

Older man reading a book outdoors.


But the difference between $1,494 and $1,503 is somewhat negligible when we look at the bigger picture: Social Security most likely won't buy you a comfortable lifestyle by itself. Those benefits should really serve as a supplement to your personal retirement savings, so if you're behind in that regard, it could pay to work a bit longer -- or a lot longer, depending on what your nest egg looks like.

2. You can file for benefits if you were born in 1958 or earlier

The earliest age you're allowed to sign up for Social Security is 62, and incidentally, it's the most popular age for seniors to claim their benefits. This means you can file in 2020 if you were born in 1958 or earlier.

But know this: You're not actually entitled to the full monthly benefit your earnings history allows for until you reach full retirement age (FRA). That age depends on your year of birth, as the following table illustrates:

Year of Birth

Full Retirement Age




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months

1960 or later



For each month you claim benefits prior to FRA, they'll be reduced on a lifelong basis. If you're first turning 62 in 2020 and claim benefits the moment you're eligible, you'll slash those monthly payments by almost 30%. That's a dangerous move if you don't have a lot of retirement savings, or another sizable income stream.

3. You can claim benefits even if you're still working

The Social Security Administration will let you collect benefits on top of a paycheck from a job at any age. But if you do so before reaching FRA, you could see some of your Social Security income withheld. Whether that happens, however, will depend on if your income exceeds the earnings test limit.

The limit for workers under FRA, and who won't be reaching FRA in 2020, is $18,240. Once your earnings surpass that point, you'll have $1 in Social Security withheld per $2 you make.

The limit for workers who start out 2020 under FRA but reach FRA later that year is much higher. In that case, you can earn up to $48,600 without having it impact your benefits. From there, you'll have $1 in Social Security withheld for each $3 you earn.

Keep in mind that the amount you have withheld by failing the earnings test will be added back into your benefits once you reach FRA. However, as mentioned earlier, when you claim Social Security ahead of FRA, you reduce your benefits in the process, and that hit will remain in effect throughout retirement -- it has nothing to do with the earnings test or whether you work and collect benefits at the same time.

Whether you're certain you'll be filing for Social Security in 2020, or are just playing around with the idea, make sure you understand the consequences of doing so. It could be that claiming benefits in the coming year is a smart move, but if doing so means shorting yourself on income for life, you may want to reconsider.