Millions of seniors today collect a monthly benefit from Social Security. For some people, that benefit represents the bulk of their income. For others, it's maybe half or less.
Now ideally, you'll end up in a scenario in retirement where you're not overly reliant on Social Security. But it's still important to make sure you're getting enough money from the program to cover your expenses. And part of that ties into filing for benefits at the right age.
The monthly benefit you're eligible to receive in retirement will be based on your personal wage history. But your filing age will determine whether you receive that benefit in full or whether it's reduced or boosted.
Image source: Getty Images.
So what filing age is right for you? There's no quick answer. But before you can land on a good filing age, you must have this key set of information to look at.
The table you need to determine when to claim benefits
If you want to be able to collect your full monthly retirement benefit based on your income history without a reduction, then you'll need to hold off on claiming Social Security until you reach full retirement age (FRA). FRA isn't a single age, though. Rather, it varies based on when you were born. And if you want to know your FRA, simply use this table to look that up based on your year of birth.
|
If Your Year of Birth Is: |
Full Retirement Age Is: |
|---|---|
|
1943-1954 |
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 later |
67 |
Data source: Social Security Administration.
Now here's how to use this table. Let's say you were born in 1960, which gives you an FRA of 67. You're allowed to claim Social Security as early as age 62. But for each month you claim benefits ahead of FRA, they're reduced on a permanent basis. And if you file at age 62, you'll face the maximum reduction possible -- whereas if you file at age 66, you'll still face a reduction in benefits, but a much lower one.
You should also know that you can delay your Social Security claim beyond FRA. For each month you do, up until the age of 70, your benefits will increase by about 2/3 of 1%. So all told, that's an 8% increase for each year you delay your filing beyond FRA.
When should you claim Social Security?
That's not such an easy question to answer. You'll often hear that filing for benefits early is a poor choice because it leads to a reduction, whereas delaying Social Security is a smart choice because it results in more guaranteed monthly income for life.
But things aren't really that simple. There are other factors to consider when deciding when to sign up for Social Security, including:
- How much retirement savings you have.
- How healthy you are, and what your life expectancy looks like.
- Whether you have a spouse to consider in your decision.
But either way, you can't make a sound Social Security filing decision without first knowing your FRA. And that's what makes the table above so essential to your retirement. So if you have to, print out a copy and keep it on hand so that as you get closer to leaving the workforce, you'll be in a good place to determine what Social Security filing age is right for you.
