Claiming Social Security isn't something you should do on a whim. The program will, ideally, pay you a monthly benefit for the rest of your life. So it's important to sign up at the right time, since your filing age will help dictate how much monthly income Social Security gives you.
This isn't to say that your filing age will be the only factor in that equation. Your lifetime earnings will also play a big role.
But you're not entitled to your full monthly Social Security benefit, based on your personal wage history, until you reach full retirement age (FRA). And if you don't know what that number is, you're not in a good position to claim Social Security at all.
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Don't file at the wrong time
You're allowed to file for Social Security beginning at age 62. But you're not entitled to your entire monthly Social Security benefit, based on your personal earnings history, until FRA arrives. So it's important to know that number. You can consult this table to find out:
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Meanwhile, for each month you claim Social Security ahead of FRA, your monthly benefit will be reduced. That may not be a terrible thing if getting that money early does other good things for you (such as allows you to start a business you're excited about), or if you have a lot of retirement savings to fall back on.
In fact, some people expressly sign up for Social Security ahead of FRA knowing full well that they're doing so because they need or want their benefits sooner for a specific reason. And poor health could be one of them.
If your health is suffering to the point where you don't expect to live as long as the average retiree, then an early Social Security filing could make financial sense for you, as it might result in you getting more lifetime income out of the program. But if you don't want a reduced benefit throughout your retirement for no good reason, then you'll need to know your FRA -- and wait until that age to file.
You're allowed to delay your Social Security filing past FRA for a boosted benefit. This incentive will run out once you turn 70. But until then, your benefit will rise 8% for each year you hold off past FRA. And that's an option you may want to consider if you're coming into retirement with a very small 401(k) or IRA balance.
You may also want to consider delaying your Social Security claim if you're in excellent health and expect to live a longer life than the average retiree. Similarly, if your family has a history of longevity, that, too, might inspire you to delay your claim.
Either way, knowing your FRA is a crucial part of the filing decision. So make a point to commit that age to memory so you don't botch your filing and regret that decision for many years to come.
