There aren't a lot of absolutes when it comes to timing your Social Security application. Some people prefer to apply at 62 and claim as many checks as possible. Others defer their applications until they're older so they can get larger checks from the program.
Both moves can be right for some people and wrong for others. But there is one claiming decision that is wrong 100% of the time, regardless of your life expectancy or financial circumstances. Below, we'll talk about what it is and how you might be able to undo it if you need to.
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Why wait to claim Social Security?
As we mentioned, delaying Social Security retirement benefits increases the size of your monthly checks. The size of the increase depends on your age at the time and your full retirement age (FRA). This is between 66 and 67 for today's workers, depending on their birth year. The following table shows how benefits get cut for seniors who claim early and grow for those who delay Social Security:
|
Social Security Checks: |
Full Retirement Age of 66 |
Full Retirement Age of 67 |
|---|---|---|
|
Get reduced by 5/12 of 1% per month |
From 63 to 62 |
From 64 to 62 |
|
Get reduced by 5/9 of 1% per month |
From 66 to 63 |
From 67 to 64 |
|
Grow by 2/3 of 1% per month |
From 66 to 70 |
From 67 to 70 |
Source: Social Security Administration.
You'll notice the increases stop at 70. That's when you become eligible for your maximum benefit. And yes, this approach means that those with FRAs of 67 get a smaller maximum benefit -- just 124% of their primary insurance amount (PIA), compared to 132% of their PIA for those with FRAs of 66. But those are the rules.
Delaying Social Security beyond 70 only costs you money. So plan to claim by then if you don't sign up sooner. Remember, you can apply up to four months before you want to receive benefits. It's not a bad idea to sign up a little in advance to make sure you don't short-change yourself.
What if you've already waited too long?
If you're already over 70 and haven't started claiming Social Security yet, apply as soon as possible. You may not be able to recoup all of your lost benefits, but you can get some of them back.
The Social Security Administration enables those at or over their FRA to claim up to six months of retroactive Social Security benefits. If you're not far past 70, this could ensure you don't miss any of the benefits you deserve.
Contact the Social Security Administration if you have any questions about retroactive benefits or when you should apply in order to claim your largest possible checks. If you plan to apply right away, make sure you have all the necessary documentation, like your Social Security number and copies of your most recent W-2, to ensure your claim is processed as quickly as possible.
