Planning when and how to claim Social Security benefits is as personal as an individual investment strategy. Several factors should be considered, such as your life expectancy, how long you expect to work, income potentially produced by other assets, how many individuals your benefits must support and how much you expect your retirement lifestyle to cost annually.
These decisions are best discussed with an experienced financial advisor to help you determine the appropriate Social Security benefit strategy for your situation. We’re always here to help when you have any questions. The following are some basic strategies you may wish to consider as you develop your Social Security plan.
Claim Early
If you suffer from health problems and/or have a family history of shorter lifespans, you may want to claim Social Security benefits early. The earliest you may begin claiming them is at age 62.1
Work Longer
Benefits are determined based on your 35 highest-earning working years. If you had lower income for many of those years but are earning significant income now, you may wish to work longer to include these higher-earning years in your benefit calculation.2
Work Even Longer
People who enjoy their job, remain in good health and see no reason to retire earlier may accrue a significantly higher benefit by delaying Social Security until age 70. In fact, delaying benefits past normal retirement age (66 or 67, depending on when you were born) allows them to increase by up to 8 percent each year. By delaying until age 70, you could receive up to approximately 132 percent of the benefits you qualified for at your full retirement age. Note that your benefit earns delayed credits even if you stop working earlier and live off your own assets until age 70.3
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1 Social Security Administration. “Your Retirement Benefit: How It’s Figured.” https://www.ssa.gov/pubs/EN-05-10070.pdf. Accessed Sept. 11, 2018.
2 Ibid.
3 Social Security Administration. “Delayed Retirement Credits.” https://www.ssa.gov/planners/retire/delayret.html. Accessed Sept. 11, 2018.
Criteria for Retirement Benefits
Applicants must earn a certain number of credits to qualify for Social Security benefits.1
- Most people need a minimum of 40 credits to qualify for Social Security benefits.
- If you don’t have 40 credits, you may qualify for additional earnings credits for time worked in another country.2
- If you do not have enough credits based on your own work record, you may be entitled to benefits based on the work record of a current or former spouse.
- Your monthly benefit is determined by average earnings throughout your working years.
- The amount of your benefit also will depend on your age when you apply.
Our firm is not affiliated with the U.S. government or any governmental agency.