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When Can I Apply for Social Security?

By Matthew Frankel, CFP® – Mar 28, 2016 at 6:02AM

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You don't have to wait until your full retirement age if you don't want to.

Photo: www.aag.com

If you're not yet collecting Social Security retirement benefits, your full retirement age for Social Security is somewhere between 66 and 67 years old, depending on the year you were born. However, you can choose to apply for Social Security several years earlier, with a reduced benefit. Here's what you need to know about the earliest you can apply for Social Security, and what you need to know about collecting Social Security before full retirement age.

What's the earliest you can apply?
The short answer is that you can apply for Social Security as soon as you turn 61 years, nine months old in order to have your benefits start at age 62.

However, even if you want to start your benefits as early as possible, you don't need to apply quite so early. According to the Social Security Administration (SSA), if you're already 62, you should be able to start benefits in the month you apply. In other words, if you just turned 62 and want your benefits to start this month, you can apply now. Since benefits are paid in the month after they're due, you don't need to apply too far in advance.

An eight-year window
Even though you can apply just before your 62nd birthday, it may not be the best financial move for you. In order to get your full retirement benefit, you'll need to wait for your full retirement age, which is between 66 and 67, depending on when you were born.

If you were born in...

Your full retirement age is...

1943-1954

66 years

1955

66 years, 2 months

1956

66 years, 4 months

1957

66 years, 6 months

1958

66 years, 8 months

1959

66 years, 10 months

1960 or later

67 years

Source: SSA

When determining your full retirement benefit, Social Security takes an inflation-indexed average of your 35 highest-earning years, and then applies a formula to this amount to determine your monthly benefit. Here is a worksheet from the Social Security administration that shows the details of the calculation process, or you can simply register at www.ssa.gov, which will allow you to view your Social Security statements. Your statements can give you an estimate of your full retirement benefit (even if you're years away from retirement), as well as some other useful information.

If you apply for Social Security before or after your full retirement age, your calculated benefit amount will be reduced or increased according to these rules:

  • For each year before full retirement age, up to 36 months, your benefit will be reduced by 6.67% per year, or 5/9 of a percent per month.
  • Beyond 36 months early, your benefit will be further reduced by 5% per year, or 5/12 of a percent per month.
  • If you decide to delay benefits beyond your full retirement age, your benefit will be increased by 8% per year, or 2/3 of a percent per month.

The point is that if you know or can estimate your full retirement benefit, you can calculate the effects of early or late retirement in order to make the best decision for you. For example, let's say that you determine that you'll need $2,000 per month from Social Security for a comfortable retirement, but your full retirement benefit is expected to be $1,750 per month at age 66. You can choose to wait until age 68 to apply for benefits, which will increase your monthly amount to $2,030.

What's the best time to apply for you?
Before you decide to apply for Social Security at 62, you need to look at your full retirement benefit and consider the effect of collecting Social Security early. Keep in mind that any benefit reduction or increase is permanent, so be sure to carefully consider the long-term effects of your decision on your financial security in retirement.

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