What do you need to do before you file for Social Security benefits? What can be done after you file for Social Security benefits? Not considering all of your options before you file can put you in a bad situation and you may be stuck with your decision.
Social Security benefits are a lifetime benefit. This can be not only your lifetime but also your spouse’s lifetime benefit. Social Security benefits were never meant to be your only income in retirement. They should complement your other sources of retirement. They make a good base income when you are trying to decide how to use your other investments.
The choices you make of when to draw your Social Security benefits affects your monthly income and that of your spouse if they survive you. Taking benefits at 62 will cost you up to a 25% reduction in monthly benefits with lesser reductions as you approach full retirement age. It will also limit the amount your surviving spouse can draw when you die. Waiting until age 70 will increase your full retirement age benefit by 32%. This also increases the benefit to your spouse if they survive you.
Of course money isn’t the only consideration when deciding when to take your benefits. Other things to consider include your health, your family history and your current financial standing. Delaying benefits can take several years to reach the “breakeven point” but if you live to age 78 you will recover the initial loss and a lot more. Looking at all of your options is the only way to make sure you are making the right decision. You have anywhere from 3 choices for single individuals to 10 choices for married couples.
The goal of the Social Security Administration is to have more than half of the retirement applications filed online. You can see all of the forms on their website. It is my experience that most people, while very smart and internet savvy, do not know about all of the options available. Not knowing all the options can result in you not receiving the maximum benefit possible in Social Security Benefits.
If you file for benefits and find later you made the wrong decision you may not be able to correct your mistake. You have one year from the time you became entitled to benefits to withdraw your application. Even if you can withdraw you have to come up with all the money Social Security paid you before they will process the withdrawal. You can only file this withdrawal once.
All that being said, my Social Security pre-retirement checklist is short but very important:
1. Before you file make sure you consider all options available to you and your spouse.
2. Talk to someone about your decision before actually filing your application.
3. If you filed an application for retirement benefits and you feel you made a mistake be sure to talk with someone. An employee of the Social Security Administration or a non-governmental Social Security consultant will help you explore any options available.