Many retirees assume they'll claim Social Security as soon as they've left the workforce. Or they plan to start their benefits at a certain age, such as 62 when checks first become available.
But before you get your first payment, you must be sure doing so isn't a mistake and that you're really ready for it. It can be difficult to know if that's the case, but there's one clear sign to be on the lookout for that suggests you definitely shouldn't be filing for benefits just yet.
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Don't file for Social Security benefits if you don't know this crucial fact
The clearest indicator that you are not yet ready for Social Security is a very simple one. You are not ready to file for benefits if you don't know exactly how much income your check will provide if you claim it now.
Knowing the amount of your Social Security check if you claim it now is very important for two key reasons.
- First, your benefit is probably going to be lower than you think it is.
- Second, your age at the time you're claiming the benefits could result in you getting a smaller payment.
See, Social Security benefits are intended to replace about 40% of pre-retirement income. That's far less money than you'll actually need in order to come close to maintaining your standard of living in your later years. Unfortunately, many people simply don't realize that and they assume they'll be able to live on Social Security benefits alone -- which is not the case. You must know exactly how much your payments will be so you can make certain you have enough additional income to support yourself.
The other big issue is that your age when you claim benefits will affect how big your checks are. You have a designated full retirement age set by the Social Security Administration. This could be as late as 67 if you were born in 1960 or later. Any time you claim benefits before full retirement age, you reduce the monthly payment you'll receive. This reduction could cut as much as 30% off your standard benefit if you get your first check at 62 when your full retirement age is 67. Delaying a claim, on the other hand, increases benefits until age 70 and could give you as much as a 24% boost with that same FRA.
If you take a look at your proposed benefit amount and it's below where you need it to be, you may decide you want to put off filing for Social Security in order to increase the money your benefits will provide to you. But you'll only be equipped to make that choice if you know how big your benefit check is before filing for it.
How can you estimate your Social Security benefits?
The good news is, it's easy to figure out how much your Social Security check is worth before you file for benefits. You can just visit mySocialSecurity, create an account if you don't have one, and sign in. You can then input your estimated retirement age and see how large your monthly check will be.
By taking this step, you can make the right choice about whether you're ready to claim benefits based on the size of your payments, how much support they'll actually offer, and what other income sources you need to fill gaps in your budget.
