Social Security benefits can have a significant effect on your retirement, so it’s wise to make sure you’re doing everything possible to make the most of them.
While you can’t begin claiming benefits until age 62, that doesn’t mean you have to wait until then to start planning. Regardless of your age and how long you have until retirement, there are a few quick and easy Social Security moves you can make right now. By taking these steps today, you can plan for a better retirement later.
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1. Figure out your full retirement age
Your full retirement age (FRA) is the age at which you’ll receive the full benefit amount you’re entitled to based on your work record. If you were born in 1960 or later, your FRA is 67. Anyone born before 1960 will have a FRA of either 66 or 66 and a certain number of months, depending on their birth year.
It’s important to know your FRA because your age when you begin claiming benefits will impact the amount you receive each month. You can claim before or after your FRA, but by doing so, you’ll receive smaller or larger checks.
If you claim as early as possible at age 62, your monthly payments will be permanently reduced by up to 30%. On the other hand, if you wait until after your FRA to claim (up to age 70), you’ll receive your full benefit plus a bonus of up to 32%.
There’s no right or wrong answer for when to claim. But when you know your FRA and how your age can affect your benefits, you can make a more informed decision.
2. Check your estimated benefit
Even if you still have years before retirement, it’s possible to check your estimated benefit amount online. By creating a mySocialSecurity account, you can see your Social Security statements and get an estimate of the amount you’ll receive at your FRA based on your real earnings.
Keep in mind that this amount could change by the time you begin claiming benefits. It’s based on an average of your income in the 35 highest-earning years of your career. If you haven’t worked 35 years yet (or you expect your income will increase between now and retirement), your actual benefit might be larger than the estimated amount.
By checking your benefit now, you’ll have a good idea of how much you can realistically depend on Social Security to provide in retirement. That, in turn, can help you determine how much you’ll need to save on your own.
3. Determine which benefits you’re eligible to collect
Most workers are eligible for retirement benefits, but you might qualify for other types of Social Security — including spousal benefits, divorce benefits, or survivors benefits.
Spousal benefits and divorce benefits are available to those who are currently or formerly married to someone who is eligible for Social Security benefits. The maximum you can receive in either of these types of benefits is 50% of the amount your spouse (or ex-spouse) is entitled to at FRA.
If your benefit amount based on your own work record is higher than that, you’re not eligible for spousal or divorce benefits. If you are entitled to your own benefits but you’d receive more by claiming spousal or divorce benefits, the Social Security Administration will pay the higher amount — not both amounts.
Survivors benefits are generally only available to widowed spouses, but there are some exceptions. If you’re financially dependent on a parent, child, ex-spouse, or other family member who passes away, you could potentially receive survivors benefits.
The Social Security Administration doesn’t always notify those who are eligible for these types of benefits, so it’s wise to see if you fit into any of these categories. You could be missing out on benefits you didn’t realize you could receive.
Maximizing your benefits
Even if you have plenty of time before you can start claiming Social Security, it never hurts to start preparing now. These simple moves could boost your benefits and let you head into retirement as prepared as possible.
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