Americans who qualify for benefits can start collecting Social Security at any point after they turn 62, but there's no one-size-fits-all answer when it comes to the ideal age to apply for yours. There are several factors that you should consider, and the best time for you to start Social Security depends on your life situation and personal goals in your retired years.
With that in mind, here are five things that could signal that it's time to apply for Social Security benefits -- some are rather obvious, while others aren't very well known.
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You need the money
This is by far the most obvious reason to start collecting Social Security, so I won't spend too much time on it. But needing the money is a great reason to claim your Social Security retirement benefit, even if you haven't reached full retirement age yet. After all, it's better to take a benefit reduction than it is to struggle for a while for the sole purpose of making your eventual Social Security benefit larger.
Your spouse is at full retirement age
Here's a less obvious one. There's a Social Security program known as spousal benefits that is designed to provide retirement income in situations where one spouse in a married couple either didn't work or earned comparatively little. Without getting into the full details, the general idea is that a spousal benefit can provide a monthly check for as much as half of the higher earner's benefit. In other words, if you get a Social Security benefit of $2,500 per month, your spouse could get as much as $1,250, even if they didn't work.
Like retired worker benefits, spousal benefits can be reduced if they are claimed before full retirement age. On the other hand, spousal benefits do not get larger for waiting beyond full retirement age. And for a spouse to collect a benefit, the primary earner must have claimed their benefit already.
Here's the key point: If your spouse anticipates collecting a benefit based on your work record, it rarely makes sense to wait beyond their full retirement age to apply.
You are about to turn 70
It's no big secret that you can get a higher Social Security benefit by waiting longer to start collecting. In fact, if you wait beyond your full retirement age, your Social Security benefit will be permanently increased by 8% for every year you wait.
Technically speaking, you can wait as long as you want to start collecting Social Security. However, the benefit increases stop once you reach 70 years of age. So even if you're still working or don't need the money, there is absolutely no reason to not claim Social Security when you turn 70.
You're prepared to leave your job
You can claim Social Security while you're still working, and if you have already reached your full retirement age (between 66 and 67 years old, depending on when you were born), there's no penalty for doing so.
On the other hand, if you haven't reached full retirement age, your Social Security benefits can be withheld if you earn more than a certain amount. For example, if you won't reach your full retirement age until after 2023, $1 in benefits will be withheld for every $2 you earn in excess of $21,240. The general idea is that if you're planning to quit your job and/or work part time, you probably won't be affected, but if you are still working and haven't reached full retirement age, it can be a good reason to wait.
You have younger children
When most people reach Social Security age, their kids are grown. But that isn't always the case. If you have children in any of the following categories, you should take them into consideration when deciding the best time to start collecting benefits:
- Under age 18.
- Age 18 and a full-time secondary school student.
- Age 18 or older with a disability that began before age 22.
If you have children in any of these categories, they can be entitled to a Social Security benefit of as much as half of your full retirement benefit, but you have to have already claimed benefits in order for them to get anything. In a nutshell, this can make it worthwhile to claim Social Security before you truly want to.
Not an exhaustive list
To be clear, these are just five possible green lights to start Social Security and there could be others. Plus, there's no one factor that determines whether you're ready for Social Security, and the best move is to consider all of the reasons for or against starting your benefits before making your decision.
