You’re probably well aware of the need to save money for retirement so that you don’t have to rely on Social Security benefits to see you through. Still, those benefits will be an important part of your finances after you retire. Claiming your benefits at the right time will help bolster your financial security.
So when is the right time? The Social Security Administration has set retirement age at anywhere between 65 and 67 depending on when you were born. But you can claim benefits as early as age 62 or as late as age 70. The most advantageous time to claim benefits varies depending on your individual circumstances.
Here is advice about when you should begin to claim Social Security.
If you are in poor health and do not anticipate being able to work much longer, and you won’t be able to make it without Social Security, claiming benefits at age 62 might be your only option. Just understand that you will receive a lower amount each month for the rest of your life. You won’t become eligible for higher benefits when you reach full retirement age. Early retirement may also lower dependent’s and survivor’s benefits for your family.
Those who wait until age 70 to claim Social Security benefits will receive the highest possible benefit amount. And any work you do beyond full retirement age gives you additional credits that will add to your benefits. So if you’re able to work, delaying your claim as long as possible might be your best bet.
Deciding when to retire if you’re single is a fairly simple matter. But if you’re married, you must consider how much each spouse has contributed to Social Security, your relative ages, and the health of each partner. Generally speaking, it usually makes the most sense for the lower earning spouse (in most cases the wife) to claim benefits early or on schedule, and the higher earning spouse (usually the husband) to claim benefits as late as possible, and no sooner than full retirement age. This also makes sense because men have a shorter life expectancy, so the wife can collect her own benefits until the husband dies and then collect survivor’s benefits, which are usually higher.
For some couples, the “claim and suspend” strategy can maximize their Social Security benefits. This involves one spouse claiming benefits at full retirement age, then immediately suspending them. This spouse then continues to work until age 70, and continues to accrue work credits that will allow him or her to claim the maximum benefit. The other spouse claims spousal benefits, which are based on the first spouse’s full retirement age benefits, as soon as he or she is eligible. In order for this to work to your advantage, the spouse that claims and suspends should be entitled to a much larger benefit than the other spouse. Be sure to do your homework before you take this route, because there are lots of variables involved.
As you can see, there’s no cut and dried answer to the question of when you should claim Social Security benefits. It all depends on your and your spouse’s situations, and whether you’re looking to maximize your monthly benefit or lifetime benefits. Deciding when to claim benefits is something that you should carefully consider well before you reach retirement age.
Tags: retirement advice, social security, start social security
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on Thursday, April 28th, 2011 at 8:34 am and is filed under Social Security.
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You’re probably well aware of the need to save money for retirement so that you don’t have to rely on Social Security benefits to see you through. Still, those benefits will be an important part of your finances after you retire. Claiming your benefits at the right time will help bolster your financial security.
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