When to elect to begin your Social Security benefits can be challenging in the best of times. I highly recommend you seek the advice of a Registered Financial Consultant or a Registered Social Security Analyst before electing to take your benefits. But regardless, here are some simple tips that might help you when you are ready to elect to take your benefits.
Retirement
If you are working still and at or near your full-retirement age, there are incentives to delay taking your benefits. For those whose full-retirement age is 66 and they delay their benefits until age 70, they can expect about 32% more in benefits than they would have received at age 66. For those like me, whose full-retirement age is 67, we could expect 24% more. For every year that you delay your benefits past your full retirement age, you can expect 8% more in annual benefits.
But what about your spouse? If you delay your retirement until age 70, you will enjoy an increased benefit for the rest of your life. But what about your spouse? Well, they would receive spousal benefits based on what you would have received at your full retirement age and not at the benefit level at which you elected to receive benefits. So, there really is no reason for a spouse to delay taking their spousal benefits once they and their spouse have reached full-retirement age.
Survivor’s Benefits
With survivor’s benefits, it does matter at what age your spouse elected to take their benefits. Meaning, if your spouse did wait until age 70 to begin taking their benefits, their spouse would then have survivor’s benefits based on the benefit of their spouse and not what it would have been at their full retirement age. That is provided the spouse is at their full-retirement age when they elect to take their survivor’s benefits.
However, no matter what your full retirement age is, you will receive 71.5% if you elect to collect your survivor’s benefit at age 60. In other words, if you elect to take the benefit as a survivor no matter what your full retirement age is, you will have a permanent reduction of 28.5% until you elect to take your benefits if they are more.
Full Retirement Age
With benefits when your spouse elects to take benefits will be determined by the year that they were born as with regular election to take benefits. For people born between 1955 and 1961, their retirement age is slightly different. As an example, someone born in 1957 has a full-retirement age of 66 years and two months and for someone born in 1960, they have a full retirement age of 66 years and eight months.
And no matter what, you must enroll in Medicare Part A at age 65. But there is a retroactive election that allows you to go back six-months to your 65th birthday to elect to sign up for Medicare Part A. This is mandatory or you could face fines and penalties for not doing so.
Remember that if you elect to take survivor’s benefits at age 60 and you have your own work history, you can always elect to switch to your benefits at your full retirement age or even delay your benefits until age 70 to earn the extra 24-32% for an annual addition.
Regardless of your benefits or when you take them, it is best to consult an expert before taking your benefits. In this regard, I can highly recommend consulting a Registered Financial Consultant or a Registered Social Security Analyst to get a professional’s opinion as to when it will be best for you to elect to take your benefits based on several factors.
If you have questions or would like an analysis, please feel free to contact me, and I will be more than happy to assist you in your Social Security endeavors. To join our mailing list simply fill out the form below.
