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When Should You Take Your Social Security Retirement Benefits

You Can Undo A Social Security Benefits Claiming Decision

When You Should Apply for Social Security to Maximize Your Benefits!

There arent many times in life you can take a mulligan. But Social Security offers you the chance for a do-over. Lets say you claimed your benefit, but now regret the decision and wish you had waited. During the first 12 months of claiming benefits, you can withdraw your application. You will have to repay all of the benefits youve received, along with any spousal benefits, but when you restart benefits, youll receive a larger amount, just as you would have if you had delayed filing in the first place.

If it has been more than 12 months since you filed for Social Security, you cant withdraw your application and restart benefits at a later date. But early retirees who have returned to the workforce are not totally out of luck: Once you reach full retirement age, you can suspend benefits until age 70. This will enable you to earn delayed-retirement credits of 8% a year . This can add up to tens of thousands of dollars for many people, says William Meyer, chief executive of Social Security Solutions.

When To Notify The Social Security Administration Of An Address Change

So, how quickly do you need to notify the Social Security Administration of a change to your address? Ideally, you should inform them of your new address before you move. You can go ahead and notify them of your new address and provide the date on which it will be effective. For instance, if you plan to move on December 1, you can notify the Social Security Administration of your new address in November. Simply tell them that you want the new address to be effective on December 1, and the change will automatically be applied on that date.

There is no hard requirement for a notification timeframe. You will not be penalized for failure to notify Social Security of your new address within a certain timeframe, although you might miss important notices. The Social Security Administration will often mail correspondence related to your current or future benefits, and you might miss this communication if you fail to update your address. This could lead to a delay in receiving future benefits. For this reason, you need to update your address as soon as possible.

What Happens If I Work And Get Social Security Retirement Benefits

You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, we will reduce your benefit. Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn.

  • We use the following earnings limits to reduce your benefits: 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 2022 that limit is $19,560.

  • In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit, but we only count earnings before the month you reach your full retirement age.

If you will reach full retirement age in 2022, the limit on your earnings for the months before full retirement age is $51,960.

Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.

Use our Retirement Age Calculator to find your full retirement age based on your date of birth.

Use our Retirement Earnings Test Calculator to find out how much your benefits will be reduced.

What counts as earnings:

Your benefits may increase when you work:

When youre ready to apply for retirement benefits, use our online retirement application, the quickest, easiest, and most convenient way to apply.

If you need to report a change in your earnings after you begin receiving benefits:

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Why Not Claim Early Rather Than Draw Down An Ira And Other Savings

Its conventional wisdom to delay tapping an individual retirement account, instead enabling it to grow tax deferred. Roughly 40 percent of beneficiaries claim reduced Social Security benefits at 62 or 63.

But many researchers say reversing the order living on retirement savings in the early years and holding off on collecting benefits is likely to increase monthly income over a lifetime.

Not Sure When To Sign Up For Benefits Here’s Why Your Precise Full Retirement Age Is A Good Choice

What You Need To Know About Social Security Retirement Benefits

Social Security is actually pretty flexible in that it allows you to sign up for benefits at any time once you reach age 62. Now financially speaking, there’s no reason to delay your filing past the age of 70, but even so, you get a solid eight-year window of time to claim your benefits — income that could help get you through retirement.

Now you should know that your monthly retirement benefit is calculated based on your personal wage history specifically, your top 35 years of earnings. But you’re only entitled to that benefit once you reach full retirement age, or FRA.

Image source: Getty Images.

FRA depends on your year of birth, and you can consult this table to see what yours is:

Year of Birth

Data source: Social Security Administration.

Here are a few good reasons to sign up for benefits at your precise FRA — and not sooner or later.

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How To Change Your Address For Ssi Benefits

If you receive Supplemental Security Income benefits, you wont have as many options for changing your address. Unfortunately, you cannot use your My Social Security account to change your address online. You can use your online account to view your contact information however, you will need to contact the Social Security Administration to make changes.

For SSI recipients, you should either call Social Security or visit your local office. You can call the main telephone number at 1-800-772-1213 or call your local office. Provide the representative with your SSN to verify your identity. Next, give them your updated street address and the date you want the change to take effect. If you visit the office in person, you can get a printed receipt that shows your new address.

For those on disability benefits who are wondering how to change their address with Social Security, the process is the same as that for retirement benefits. You can change your address online, over the phone, or in person. The same goes for spousal benefits or survivor benefits. While you might not be able to use a PO box with some government agencies, the Social Security Administration does typically allow the use of a PO box.

When Can I Start Collecting Social Security

The minimum age to claim benefits is 62. If you are turning 62 and need the income from Social Security to support yourself, you can start claiming your benefits now. However, if you have enough other income to keep you going until you are older, you may want to delay increasing the size of your monthly benefit.

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Other Pensions Might Reduce Your Social Security Benefits

Your benefits will be affected if you have a pension from a job that didnt have Social Security taxes taken out of your paycheck. Common examples include people who worked for a public education system, railroad workers and Federal government employees hired before 1984 who are covered by the Civil Service Retirement System .

Two complicated provisions will affect your claiming strategy: the Windfall Elimination Provision and the Government Pension Offset . The WEP reduces your own benefits by a discounted factor based on how many years you worked in jobs that did not withhold Social Security taxes. The GPO reduces your spousal and survivor benefits by two-thirds of the amount of your noncovered pension.

Benefits Of Delaying Starting Social Security

How to Calculate Your Social Security Benefits

Social Security is a government program designed to help seniors cover the cost of living in retirement. It was started under President Franklin Delano Roosevelt in the 1930s, part of his New Deal to combat the Great Depression. Workers pay taxes to feed the Social Security fund throughout their working life and are sent a monthly check in retirement. The amount they receive each month is determined by how long they worked and how much they contributed during their working years.

The longer you wait to file for Social Security, the more youll get each month. This is especially true for anyone thinking of filing below the full retirement age , which is generally either 66 or 67, depending on when you were born. If youll be under the FRA for the entire year, the Social Security Administration will withhold $1 from your check for every $2 you earn over $19,560 in 2022. If youll reach your FRA in 2022, you lose $1 from your check for every $3 you earn over $51,960, if you hit that amount before your birthday.

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Eligible Family Members Include:

  • Ex-spouses, if the marriage lasted for at least 10 years and they have not remarried
  • Children under 18, or up to 19 if still enrolled in high school
  • Children of any age who were disabled before 22 — that is, not earning more than $1,260 per month in 2020, having a medical condition that results in severe functional limitations and that is expected to last 12 months or longer or result in death

Spouses and ex-spouses must be at least 62 in order to claim benefits, and spouses and children must wait for the worker to begin claiming benefits themselves before they can claim family benefits on their record.

You Want The Money Now

Even if you don’t need your benefits early to support yourself, you may have other reasons for wanting to take them as soon as possible.

Some people are concerned that Social Security may be unable to meet all of its obligations in the future, so they might as well get their benefits now. Others believe they could do better by collecting benefits and investing that money rather than leaving it in the government’s hands.

That said, you would have to be a skilled investor to beat the 6% to 8% guaranteed annual return on your money that Social Security offers to those who wait until full retirement age or later.

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When A Spouse Dies

When one spouse dies, the surviving spouse is entitled to receive the higher of their own benefit or their deceased spouses benefit. Thats why financial planners often advise the higher-earning spouse to delay claiming. If the higher-earning spouse dies first, then the surviving, lower-earning spouse will receive a larger Social Security check for life.

When the surviving spouse hasnt reached their FRA, they will be entitled to prorated amounts starting at age 60. Once at their FRA, the surviving spouse is entitled to 100% of the deceased spouses benefit or their own benefit, whichever is higher.

Questions Regarding Social Security

5 Steps to Maximize Your Social Security Benefit  Kiplinger

If you have questions regarding Social Security, you may want to visit the Social Security Administration’s website at www.socialsecurity.gov to find your answers. If you prefer to speak to someone directly, the SSA is available to speak with callers Monday thru Friday from 7:00 a.m. to 7:00 p.m. The toll-free number is 800-772-1213.

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Timing And Your Health Coverage

Your health insurance coverage can also play a role in deciding when to claim Social Security benefits. Do you have a health savings account to which you would like to keep contributing? If so, note that if youre age 65 or older, receiving Social Security benefits requires you to sign up for Medicare Part Aand once you sign up for Medicare Part A, youll no longer be allowed to add funds to your HSA.

The SSA also cautions that even if you delay receiving Social Security benefits until after age 65, you might still need to apply for Medicare benefits within three months of turning 65 to avoid paying higher premiums for life for Medicare Part B and Part D. However, if you are still receiving health insurance through your or your spouse’s employer, you can wait until that coverage ends to enroll in Medicare penalty-free.

As of Dec. 26, 2021, Social Security offices are only open by appointment. To get an appointment you need to be in a limited, critical situation. Most people will have to transact their business online, by phone, or through the mail.

Your May Have To Pay Taxes On Social Security Benefits

Most people know that Social Security is funded by a tax on earnings, currently 6.2% for the employee . But some retirees dont realize that you may well have to pay income tax on Social Security benefits when it comes time to claim them. Benefits lost their tax-free status in 1984, and the income thresholds for triggering tax on benefits havent been increased since then.

It doesnt take a lot of income for your Social Security benefits to be taxed. Your benefits wont be taxed if your provisional income is less than $25,000 if youre single or $32,000 if youre married. If youre single and your provisional income is between $25,000 and $34,000, or married filing jointly with provisional income between $32,000 and $44,000, up to 50% of your Social Security benefits may be taxable. If your provisional income is more than $34,000 on a single return or $44,000 on a joint return, up to 85% of your benefits may be taxable.

The Social Security Administration says about 40% of beneficiaries pay taxes on their benefits. Since the thresholds arent adjusted for inflation, the number of beneficiaries who pay taxes on Social Security benefits increases every year. The Social Security Trustees annual report estimates that taxes on Social Security will total $45.1 billion in 2022, up from $34.5 billion in 2021.

You may also have to paystateincome taxes on your Social Security benefits. See our list of the 12 States That Tax Social Security Benefits.

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Your Benefits Won’t Take A Hit

Clark’s Take on Delaying Your Social Security Benefit

Claiming Social Security at 62 is tempting — after all, you get to collect your benefits much sooner than you would by waiting until FRA. But for each month you sign up for Social Security ahead of FRA, your monthly benefit gets reduced, and that decrease then remains in effect on a permanent basis. The upside of filing at FRA is that you won’t cut your benefits. And given the many expenses you might face in retirement, from housing to healthcare to keeping yourself busy, that’s important.

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Your Social Security Retirement Options: Early Full And Late Retirement

You may opt to receive benefits early , at full retirement age, or after full retirement age. Your full retirement age varies between 66 and 67 depending on when you were born.

If you claim benefits before full retirement age. Almost 40% of retirees claim benefits as soon as they turn 62 . If you claim early retirement, you’ll receive up to 25% less than you would have if you’d waited until full retirement age .

If you claim benefits at full retirement age. Although claiming at full retirement age entitles you to “full” retirement benefits, you’re actually given an incentive to wait even longer, as described next.

If you claim benefits after full retirement age. From your full retirement age until you reach age 70, the Social Security Administration will increase your benefits by 8% per year.

Let’s see how this plays out. Imagine that you’d receive $21,180 annually if you retired at your full retirement age . If you retired early, at age 62, you’d receive only about $15,885 in Social Security annually from retirement until the end of your life. If you waited to retire until age 70, you’d receive about $28,000 annually, an 87% increase in monthly payments over claiming them at age 62.

What About Taxes On Social Security

Keep in mind that Social Security benefits may be taxable, depending on your combined income. Your combined income is equal to your adjusted gross income , plus non-taxable interest payments , plus half of your Social Security benefit.

As your combined income increases above a certain threshold , more of your benefit is subject to income tax, up to a maximum of 85%. For help, talk with a CPA or tax professional.

In any case, if you’re still working, you may want to postpone Social Security either until you reach your full retirement age or until your earned income is less than the annual limit. In no situation should you postpone benefits past age 70.

Recommended Reading: Ssa.gov/benefits/retirement/apply.html

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