When Should I Apply for My Social Security Retirement Benefits- An Essential Checklist

So you’re approaching 62 or maybe 66 and you’re wondering, is it time to tap into my social security retirement benefits?  Or maybe you’re in the retirement planning stages and wondering how best to leverage your benefits.  Either way, reviewing the following checklist of factors should help you arrive at an answer.

1.)    How much will I get? This will depend on your earning record, the year you were born and probably most importantly at this point, when you choose to tap into them. 

If you are thinking of applying for your benefits prior to your full retirement age (you can apply as early as age 62), the amount of benefits you will receive over the course of your lifetime will decrease for every month you’ve received those benefit prior to age 66, your full retirement age.  (Please note that although for ease of reading I will refer to age 66 as full retirement age, your full retirement age will differ slightly based on the year you were born.  You can find out your full retirement age on www.ssa.gov). 

Contrastingly, you can increase your benefit amount for every year you delay receiving your benefits past age 66 up to age 70.  There is an often cited phrase called your “break even point.”  This phrase can either refer to the point at which waiting until 66 would have been to your advantage rather than taking benefits at age 62 or the point at which waiting to taking benefits until age 70 would be to your advantage rather than taking benefits at 66.  

So for example, it is often cited that if you take retirement benefits at the earliest possible time, age 62, and live past 77 then your total lifetime benefits will be less than if you had waited until age 66.  Similarly, it is often cited that if you wait to take benefits until you are age 70, and live past 79 then your total lifetime benefits will be more than if you had taken benefits at age 66.  These figures aren’t entirely accurate because your particular “break even points” will differ slightly based on your earning record and the year you were born.  You can figure out your own “break even points” at www.ssa.gov . 

2.)    Do I have an immediate need for the funds? If you need the money to pay the bills or have enough retirement money saved up for yourself, but have a family member for example, that needs the money, then you may want to consider taking the funds early.

3.)    Will taking my funds now allow me to keep other profitable investments in place longer? What is going to provide you the more profitable return?

4.)    Am I still working?  If you are still working and are below age 66, you will lose $1 for every $2 you earn above $14,160.

5.)    How is my health? If you have a particular health condition or family history that makes it unlikely that you will live past 66 or 79, depending on whether your considering early or late benefits, then you may want to consider taking benefits early.

6.)    How stable do I believe the current social security system is? A lot of people are of the opinion that social security retirement benefits are unsustainable and that they will be reduced over time. If that is the case then it may be better to start tapping into your social security retirement benefits as soon as possible.