One of the most important retirement decisions you might make in your lifetime is deciding when to start collecting Social Security. Although the monthly benefit you're entitled to will hinge partially on your personal wage history, the age at which you sign up to receive it will also have an impact.
That's why it's so important to sign up for Social Security at the right time. But if these signs apply to you, it may be that you're setting yourself up to make a poor filing decision.
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1. You don't know your full retirement age
You can sign up for Social Security at any age starting at 62. In fact, there's not even such a thing as a final age to claim Social Security, as you can do so as late as you want to. However, from a financial standpoint, there's no sense in delaying your filing past the age of 70.
Meanwhile, you're entitled to your full monthly Social Security benefit based on your personal earnings history once you reach full retirement age. That age is 67 if you were born in 1960 or later. If you were born in an earlier year, it's 66 or 66 and a specific number of months.
Filing for Social Security without knowing your full retirement age is a definite mistake. You might decide that you want to claim your benefits early, before full retirement age arrives. But you need to know what that age looks like before making your choice, since claiming benefits sooner will mean reducing them in the process -- for life.
You may also have the goal of boosting your Social Security benefits by delaying your filing beyond full retirement age. But again, you need to know that age to implement this strategy.
2. You haven't consulted your spouse
If you're married, the decision to claim Social Security is one you should arrive at jointly. You may be thinking: "But this is my benefit we're talking about. My spouse is entitled to a benefit of their own."
Even so, in some cases, your filing might impact your spouse financially, such as in the case of survivors benefits. So it's important to have a conversation about when to claim Social Security so you're both on the same page. You might also decide to have one of you file for benefits immediately while the other delays their claim to get the best of both worlds -- some near-term income and a higher benefit for the person who waits.
3. You haven't looked at your estimated monthly benefit yet
You might think you can afford to claim Social Security early and reduce your monthly benefit in the process. But if you don't know what that number entails, you're not in a very good place to make that call.
The good news is that it's easy to see what monthly benefit you're in line for. You can either review your most recent earnings statements (which you should've gotten in the mail if you're 60 or older), or you can create an account on the Social Security Administration's website and access that statement there.
The decision to claim Social Security is a big one. Make sure you know your full retirement age, consult with your spouse, and get a snapshot of what your monthly benefit will look like before moving forward.
