Social Security generally ends up being an important source of income for retirees. So it's important to file for benefits at the right time since your filing age will determine how much money you'll end up getting each month.
Figuring out when to claim Social Security can be tricky. But here are a few signs that you may be ready to sign up now.
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1. You've reached full retirement age
You're entitled to your full monthly Social Security benefit based on your personal earnings history once you reach full retirement age, or FRA. That age is 67 if you were born in 1960 or later.
If you're younger, you may still be eligible to claim Social Security, since you're allowed to file for benefits as early as age 62. But signing up before FRA means accepting a reduced monthly benefit for life. That's something you may not want to do, especially if your nest egg isn't particularly robust.
You should also know that you can boost your monthly benefit by delaying your filing past FRA. That's an option to consider if you don't have a lot of savings. But with a moderate amount of savings, you may be fine to sign up at FRA and not wait.
2. You've put in 35 years in the workforce
The monthly Social Security benefit you receive will hinge on how much money you earned during your career. The Social Security Administration takes your 35 highest-paid years in the labor force into account when calculating your monthly benefit. But if you don't put in a full 35 years in the workforce, you stand to lose out.
For each year you're without an income, you'll have a $0 factored into your personal-benefits equation. And too many of those $0s could leave you with a lower monthly benefit than you'd like.
3. You've talked things over with your spouse
If you're single, you only have to consider your personal needs when deciding when to claim Social Security. But if you're married, it's important to talk things over with your spouse for a couple of reasons.
First, if you and your spouse are a financial team, you should be making all major financial decisions together. The Social Security benefit you're entitled to may be your benefit, but it's money you might spend jointly.
Second, the benefit you're eligible for from Social Security might be something your spouse relies on in your absence. Let's say you pass away before your spouse. At that point, they'll be entitled to survivors benefits that equal 100% of the monthly benefit you received.
If you claim Social Security early, you'll leave your spouse with a lower monthly benefit upon your passing. If you wait until FRA or delay your filing past that point for a boosted benefit, your spouse will have more monthly income to look forward to from Social Security. Either way, it's important to sync up on that decision.
The last thing you want to do is claim Social Security at the wrong time. But if you can check these items off your list, you may be more than fine to move forward with a filing right away.
