You can sign up for Social Security as soon as you turn 62, but you may have heard that signing up so early can diminish your checks permanently. If this worries you, you can consider postponing the benefits to a later age, e.g. 65.
But whether it is a smart decision for you depends on your personal goals, finances and life expectancy. Here’s a look at when it’s a good idea and when it’s not.
Times have changed
In the decades after the beginning of social security, 65 were considered full retirement age (OFF). This is when you become eligible for your full social security benefit based on your work history. By starting earlier than this, your checks shrank, while delays in benefits after this age increased them until you reached the maximum benefit at 70.
But as people lived longer, the government changed the definition of FRA. For those born in 1943 and later, FRA falls somewhere between 66 and 67. This means that the requirement of 65 is now technically considered to require early.
If you sign up then, your checks will be reduced, but it will not have the same effect as starting at 62 would. When you sign up at 62, you only get 70% of your full benefit per. check if your FRA is 67 or 75% if your FRA is 66. But if you sign up at 65, you get 86.7% of your full benefit per. check if your FRA is 67 or 93.3% if your FRA is 66.
So if you qualify for the average monthly check of $ 1,661 at 67, you would only get around $ 1,163 per. check if you signed up immediately at 62. But you would get $ 1,440 a month by deferring until 65. That’s a difference of $ 277 a month just to wait three years.
So is it a smart move to start social security at 65?
Ultimately, you should choose when you want to sign up Social Security based on your life expectancy and financial situation.
Signing up right away at 62 may be the right choice if you need your Social Security checks to help cover your bills, or if you do not believe you will live long.
But those who expect to live up to the 80s or above often get the most out of the program by postponing the benefits if they can afford it. Some even choose to defer until they qualify for their maximum monthly benefit at 70. This is 124% of your full benefit per annum. check if your FRA is 67 or 132% if your FRA is 66.
The catch is that you do not know exactly how long you want to live. So figuring out the ideal time to sign up for social security is not that straightforward. If you are worried about possibly shortening yourself by signing up too early or too late, 65 may be a good compromise. Or you can just wait until your OFF.
Explore a few different options until you find an age that suits you. If you need help, use the benefit calculator in your my social security account to find out what kind of benefit you will be entitled to at any age.
Social security place in your pension scheme
There is no “right” time to demand social security. The most important thing is that you understand how social security fits into your overall pension scheme so you know how much you personally need to save.
Once you have chosen a rake and you know approximately how much of your monthly retirement expenses it will cover, you can start figuring out how much you need to save on your own. With this savings goal in mind, you can start paving the way for a comfortable retirement.