There’s a considerable probability that Social Security will come in useful during your golden years. Even if you have a sizable savings account in your retirement years, you may still rely on those benefits to meet your different bills and pursue hobbies and leisure activities that you may not have had time for while working.
As a result, getting as much money out of Social Security as possible pays off. And making one easy change might help you secure a greater monthly benefit for the rest of your life.
Look up your full retirement age on the internet.
Your monthly Social Security payment will be determined by your income history, specifically the amount of money you made during your 35 most profitable years in the workforce. However, you won’t be eligible for the full benefit until you reach full retirement age, or FRA.
Once you reach the age of 62, you can apply for Social Security. However, you should be aware that for each month you file for benefits before your FRA, your payments will be decreased — and this will be permanent. So, if your FRA is 67 and you file for Social Security at 64, your benefits will be reduced by 20%, and that lower benefit will generally remain in force for the rest of your Social Security payments.
That’s why it’s critical to learn your FRA before retiring. That way, you’ll know when it’s time to file for Social Security, and you’ll be able to avoid mistakenly filing early and reducing your payments.
Is it a good idea to apply for Social Security at FRA?
It’s possible that collecting benefits at your specific FRA isn’t the best option for you. If you’ve been saving diligently for an early retirement, for example, you might decide to enrol in Social Security at the age of 65 to keep your plans on track.
Furthermore, you should be aware that for each month you wait after FRA to file, your benefits will increase. This incentive expires when you reach the age of 70. However, if your FRA is 67 and you sign up for Social Security at the age of 70, you’ll get a 24 percent increase in your payments that will last the rest of your life.
As a result, you are not obligated to collect your benefits at FRA on the spot. All you need to know is how old that person is so that you may make an informed filing decision. Now that you’ve planned out that information, all you have to do is take 30 seconds to scribble it down. It’s a deceptively basic move that could make all the difference once you reach retirement age and need to start narrowing down your Social Security filing age.