The start of a new year is a good time to focus on financial matters -- things like updating your household budget and checking your investment portfolio. It's also a good time to pay attention to Social Security matters. Here are a few key moves it pays to tackle early on in 2024.
1. Figure out your full retirement age
Full retirement age, or FRA, is the age at which you're entitled to your complete monthly Social Security benefit based on your personal income history. That age is either 66, 67, or 66 and a specific number of months. It depends on the year you were born.
It's important to figure out your FRA, since it might influence your retirement plans. Many people can't retire without getting money from Social Security. If that's a boat you expect to be in, it'll help you to know the age when claiming your full monthly benefit is possible.
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2. Check your most recent earnings statement
Each year, the Social Security Administration (SSA) issues workers an earnings statement. Yours will contain a wage summary for the year, as well as an estimate of your future monthly Social Security benefit.
It's important to review that document annually for a couple of reasons. First, if you end up having your income underreported, you'll have an opportunity to contact the SSA and get that information updated. Underreported income could result in less money from Social Security down the line, since benefits are based on individual earnings.
That earnings statement will also give you a handle on what Social Security might pay you in retirement. That information might inspire you to ramp up on the savings front, if the monthly benefit you're in line for is smaller than the benefit you were initially anticipating.
You can access your earnings statement by setting up an account on the SSA's website. However, if you're 60 or older, you should automatically get a copy in the mail. Whether you can find that copy is a different story, so in the worst case, access the online version.
3. Work through different filing strategies if you're nearing retirement
If you're getting close to ending your career, then it may be time to try to narrow down a Social Security strategy. Although FRA is when you can get your monthly benefit in full, you're allowed to sign up for Social Security as early as age 62, albeit at a reduced rate.
You can also delay your Social Security filing past FRA and boost your monthly benefits in the process. This may be a route worth exploring if you're nearing the close of your career and aren't particularly happy with your 401(k) or IRA balance.
Of course, there are pros and cons to filing for Social Security at various ages. So the process of landing on the right filing age might take months. Start now so you're not struggling on the cusp of retirement.
You may be excited to kick off a new year and make the most of it. Focus on these Social Security moves now so you're able to feel more confident and informed about your future.
