Social Security options for retirees are limited in number, but overlooking them can be costly. Once you make a decision and file for benefits you are locked into those benefits with very few choices for change. While the Social Security Administration does offer free support, it is not uncommon to experience long lines and wait times to discuss your options with them. Their assumption is you have researched all of your options for filing, and decided that filing an application is best for you and your own situation.
The problem is most individuals do not know what choices are available. Most folks know you can file at age 62. Did you know if you were born between 1943 through 1954 and you file for Social Security benefits at age 62 you take a 25% reduction in your monthly benefit from what you would receive at your full retirement age of age 66? This reduction is permanent and will be with you for the rest of your life. If you were born in 1957 and you file for Social Security benefits at age 62 you take a 27.5% reduction in your monthly benefit from what you would receive at your full retirement age of 66, 6 months?
Do you know your full retirement age? It is different for individuals and is based on the year you were born. It was initially age 65 but starting for individuals born in 1938 it began to increase and now reaches age 67 for individuals born in 1960 or later. Those born in 1960 or later who take Social Security benefits at age 62 receive a 30% reduction in benefits. This reduction not only affects your benefits but also limits the benefits you leave for your widowed spouse.
Did you know if you delay receiving monthly benefits past your full retirement age you receive delayed retirement credits that equal an 8% per year increase in your monthly benefit? Those whose full retirement age is 66 would receive a 32% increase in their monthly benefit payment if they wait until age 70 to receive benefits. Those are just a few options available to individuals.
A single individual has about 3 different options, a married couple has about 9 different options and a widow/widower has about 4 different options to consider before filing for their Social Security. The Social Security Administration will talk to you about some of the well know options, but you’ll rarely get them to discuss things like the file and suspend and restricted application options available to married couples. And as more cuts are being made to federal budgets, the number of staff and office hours are declining while the number of applicants is increasing. This creates a difficult situation for retirees seeking the information needed to make good decisions.
This site is not intended to be a “magic bullet” for acquiring riches at the expense of Social Security, nor is it a manual for manipulating the system to receive undeserved benefits. What it is however, is a free resource that retirees can use to maximize their retirement benefits. You only apply for Social Security retirement once in your life, so it is reasonable to assume few of you have the expertise to recognize all of your options. Hopefully, after understanding your options, you will realize there are many more things to consider than simply what date to submit your application.
The best strategy for reading through the information here is to review it all in order the first time. You will come across equations and formulas in certain places that can be overwhelming initially. Do not interrupt your reading by spending hours trying to learn them. Work your way through the content first and come back to the difficult parts. The calculations are provided as resource, and in most cases, you only need to recognize their output to maximize your benefits.