If you're planning to retire at some point this year, you may be gearing up to sign up for Social Security. Even if you're not retiring in 2024, you may be looking to claim Social Security for a variety of reasons, whether it's to use the money to renovate your house, cover the cost of a move, or travel.
Your Social Security filing age could have a big impact on the amount of money the program will pay you every month. With that in mind, here are three pieces of information you absolutely need to have if you intend to claim Social Security this year.
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1. Your full retirement age
Full retirement age, or FRA, is the age when you're entitled to your complete monthly Social Security benefit, based on your individual wage history. That age will hinge on your year of birth. You can look at the following table to see when FRA arrives for you.
|
Year of Birth |
Full Retirement Age |
|---|---|
|
1943-1954 |
66 |
|
1955 |
66 and 2 months |
|
1956 |
66 and 4 months |
|
1957 |
66 and 6 months |
|
1958 |
66 and 8 months |
|
1959 |
66 and 10 months |
|
1960 or after |
67 |
Data source: Social Security Administration. Chart by author.
It's possible to collect Social Security beginning at age 62. But remember, for each month you claim benefits ahead of FRA, they'll be reduced on a permanent basis. If you expect to be pretty reliant on Social Security as a retiree, then you may want to wait until FRA to sign up.
2. Your estimated monthly payment
You wouldn't accept a job offer without knowing the salary, right? Similarly, it's not a good idea to sign up for Social Security if you have no idea what monthly benefit you're entitled to.
Let's say you're turning 62 in 2024 and you know that, based on your savings, you'll need $1,500 a month from Social Security to cover your anticipated expenses. You may be able to come away with $1,500 in Social Security by filing at age 62, based on what your complete benefit at FRA looks like. So that's essential information to have.
Thankfully, there's a really easy way to get it. Just create an account on SSA.gov and access your most recent earnings statement. It should include an estimate of your monthly benefit, as well.
3. Your upside in waiting to file
While FRA is the age when you're eligible for your complete monthly Social Security benefit, you can also delay your filing beyond FRA for an even larger payday. For each year you hold off on filing past FRA, your monthly benefit will grow by 8%, up until age 70.
You may be looking at claiming Social Security this year at your precise FRA. But before you make that call, run the numbers to see what waiting a year, two, or three might do for you. You may come to the conclusion that it's best to put off your filing for a more robust income stream.
The decision to claim Social Security is one of the most important ones you might make in the context of your retirement, so it's essential to go into that decision with confidence. Knowing these three things could put you in a better position to make an informed choice.
