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Don't Claim Social Security Benefits Until You Can Answer These 3 Questions

By Christy Bieber - Apr 4, 2021 at 8:05AM

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Answering them helps ensure you make a fully informed choice.

There are a few decisions that have a profound impact on your retirement. When you claim your Social Security benefits is one of them. These benefits will be an important source of your retirement funds, and they may be the only source guaranteed to last for life. 

Unfortunately, many people don't really understand how to decide when to claim Social Security, or even why this matters. To make sure you don't end up with regrets about your choice when to start your checks, answer these three questions before filing for benefits. 

Older couple looking at laptop in dismay.

Image source: Getty Images.

1. How much of your income will Social Security replace?

First things first: You'll want to make sure you have a realistic picture of the role your benefits will play in retirement.

See, most experts recommend that you replace around 70% to 80% of your pre-retirement earnings if you don't want a decrease in your quality of life. But Social Security is designed to replace only about 40% of pre-retirement income.

Understanding that is crucial before claiming benefits as you don't want to over-rely on your retirement checks and end up with an insufficient amount of money to live on.

2. How does your age affect your Social Security checks?

You first become eligible to start your Social Security checks at age 62. But before you file, make sure you understand the rules for how your claiming age impacts the payments you receive. 

Theoretically, Social Security is designed so someone who claims later in life should get around the same amount of lifetime benefits as someone who starts their checks ASAP at 62. If you claim your benefits when you're younger, your checks are smaller. For each year you delay after 62, your checks get larger up until the age of 70. 

You need to understand whether your age at the time you're thinking about claiming is your "full retirement age," in which case you'll get your standard benefit -- is before it (which would result in a reduced benefit), or after it (which would result in an increased benefit).  

Answering this question is especially important, because it will affect both your monthly checks as well as your lifetime benefits. Many people do better by waiting to claim their benefits until 70, but if you're in poor health you may wish to start yours sooner. 

3. How long do you need to work to avoid shrinking your benefit?

The Social Security Administration gives you benefits equal to a percentage of your average wages during your 35 highest-earning years (after adjusting wages from throughout your career for inflation). While you typically become eligible to get Social Security checks on your own work history after just 10 years of work, you must work for at least 35 years to avoid shrinking your checks.  

For those whose earnings have increased over time, a longer work history could actually be beneficial. If you work an extra few years at a higher earning level, those years will become part of the 35 years used to determine your benefits, and some lower earning years will be dropped from the calculation. 

By making sure to work at least 35 years, making an informed choice about the age you claim benefits, and making a realistic assessment of what income your benefits can provide, you can decide if starting your Social Security checks now is the right approach. 

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