The act of claiming Social Security is pretty straightforward: You notify the Social Security Administration that you're ready to start receiving checks and provide the necessary documentation to verify your eligibility. But deciding when to apply for benefits isn't always that simple.
There are a lot of factors you need to weigh if you want to get the most out of your checks. But if you've done the following three things, that's a good sign that you're ready to claim Social Security.
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1. You've fulfilled the minimum eligibility requirements to claim
This might seem obvious, but it never hurts to double-check that you're actually eligible for Social Security before you apply. For starters, you can't claim retirement benefits until you're at least 62 for the whole month.
The Social Security Administration calculates this oddly. If your birthday is on the first or second of the month, your birth month is your first month of eligibility. But if you were born on any other day, you don't actually become eligible for benefits until the month after the month you turn 62.
You also need to have worked long enough to earn 40 credits before you can claim Social Security. A credit is defined as $1,640 in earnings in 2023, and you can earn a maximum of four credits per year. In the past, the required earnings for a credit were lower. So if you've worked at least 10 years and earned more than $6,560 in each of those years, you should be good to go.
If you have any doubts, you can always check your earnings record in your my Social Security account. This shows how much money you've paid Social Security taxes on throughout your career.
If you haven't accumulated enough credits, you may be able to claim a spousal Social Security benefit. Or you might have to work a little longer before you can apply.
2. You understand the implications of claiming now
There's no such thing as a "right" age to claim Social Security, but applying at certain ages could lead to a larger lifetime benefit. Figuring out the optimal time for you to apply for Social Security requires an understanding of the various factors influencing your benefit.
For example, your full retirement age (FRA) determines when you qualify for the full benefit you've earned based on your work history. This is somewhere between 66 and 67, depending on your birth year.
You can claim under your FRA, but doing so shrinks your checks. Starting right away at 62, for example, means you'll only get 70% of your full benefit per check if your FRA is 67 or 75% if your FRA is 66. You can also choose to delay benefits beyond your FRA and your checks will keep growing until you reach your maximum benefit at 70. That's 124% of your full benefit per check if your FRA is 67 or 132% if your FRA is 66.
As a general rule, claiming early makes sense if you are struggling to afford your bills without Social Security or don't believe you'll live past your 70s. But if these don't apply, you may get more money overall by claiming later.
If you plan to claim under your FRA and you're still working, you also have to worry about the Social Security Earnings Test. This withholds money from your Social Security benefits if your annual income exceeds certain thresholds.
But that money isn't gone forever. When you reach your FRA, the government recalculates your benefit to account for the money it withheld previously. However, your future checks probably still won't be as large as they would've been if you'd just delayed Social Security until your FRA in the first place.
3. You've talked it over with other affected household members
Single adults with no dependents don't need to take anyone else's opinion into consideration when deciding when to apply for Social Security. But that's not the case for everyone. Spouses and minor children or those with disabilities are eligible to claim Social Security benefits on your work record, but they can't do so until you sign up first.
This could affect when you decide to claim. For example, if you have a minor child who could receive benefits on your record for a few more years, you might choose to claim early in order to bring those additional benefits into the household while you can. Otherwise, if you delay, you would forfeit those funds.
Talk over your decision to claim with the other adult members of your household who will be affected by your choice. Try to come up with the solution that will provide your household with the most money over the long term.
Taking these three steps is completely optional, but it's worth finding some time to do if you haven't already. It is possible to change your mind about claiming Social Security once you've signed up, but this is difficult. So it's much better to wait until you feel confident that you're ready before applying.
