This article was originally published on Jan. 4, 2015, and updated on May 5, 2016.
When it comes to applying for Social Security retirement benefits, most people are unfamiliar with the process. That's no surprise, as we generally only retire once and only apply for benefits once. Fortunately, applying for Social Security benefits isn't as hard as earning them.
Here's a handy guide to what you need to know about the process. (Keep in mind that this article refers to retirement benefits -- not disability, survivor, or other benefits disbursed by the Social Security Administration (SSA).)
Timing is key
While the process of applying for Social Security benefits is relatively straightforward, the question of when to do so is far more complicated. You might, of course, simply apply for them at your "full" retirement age, which the Social Security Administration sets according to your birth year. For those born in 1937 or earlier, it's 65; for those born between 1943 and 1957, it's 66; and for those born in 1960 or later, it's 67. For anyone in between, their retirement age is somewhere in between, in two-month increments.
That seems simple enough, but you can elect to start receiving benefits as early as age 62 or as late as age 70. For each year beyond your full retirement age that you delay, your benefit rises by about 8% -- this means a 24% boost if you delay from age 67 to age 70. Those starting at age 62 will collect a benefit that's up to 30% less than their "full" retirement-age one. The SSA notes that if you run the numbers and live an average-length life, whether you collect early or late shouldn't make a huge difference. For example, you will get significantly smaller benefit checks if you start at 62 instead of 67, but you'll get 60 more of them, which amounts to a lot of money.
Still, there are reasons to consider starting earlier or later, such as whether you're still working, how healthy you are, how long you expect to live, and whether you're married and have a spouse's benefit to consider. If you claim Social Security before your full retirement age and are still working, then your Social Security benefits will be reduced if you earn more than a certain amount. The SSA notes: "If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2016, that limit is $15,720." Once you reach full retirement age, earned income of any amount will not reduce your benefits.
It's worth spending some time reading up on Social Security strategies to see when it seems best for you to begin receiving benefits. Also, spend a little time at the SSA website, where you can use the Retirement Estimator to get an idea of how much your monthly benefit will be at different retirement ages.
Once you're ready to apply for Social Security benefits, what do you do?
First off, know that most folks can take care of it all online. To do so, you need to be at least 61 years and nine months old and not currently receiving your own Social Security benefits. You also must not have already applied for retirement benefits, and you must apply no more than four months before you want to start receiving your monthly benefits. (Note that you can apply for Medicare at the same time if you're no more than three months away from age 65, and you can even apply for only Medicare through the same online application and put off applying for your Social Security benefits.)
You can apply for your Social Security benefits over the phone at (800)772-1213 or TTY (800)325-0778 between 7 a.m. and 7 p.m. on weekdays or in person at your local Social Security office. But for most of us, applying online is the way to go, as it's quick and spares you a lot of time traveling to and from the Social Security office and waiting in line. The SSA estimates that the process will take about 15 minutes, and you can start and stop -- and change or save your answers -- along the way. You'll get a receipt that you can print for your records, and you can check on the status of your application online with the confirmation number that you'll receive.
That's pretty much it! Just remember: The trickiest part of the process is deciding when to start receiving your benefits and formulating any strategy if you have a spouse with benefits, too.
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