I am over 66 and can retire anytime. Planning on retiring later this year.
my question is there a better time of the year to apply for Social Security?
More specifically, the PDF linked to on this page, titled “Your Retirement Benefit, How is it Figured?” There’s a handy worksheet on the back.
It’s relative to your age, not the season of the year. The amount you will get per month does not change if you start collecting any time between ages 66 and 70, unless you earn a lot more money in those four years than you did before and it raises your average. If you can wait until you’re 70 to start collecting, you’ll get a lot more per month. If not, not.
From my fuzzy brain I am remembering something about it being better to start just before the annual cost of living adjustment is made rather than after. does that still apply?
You mean you can start drawing Social Security, not retire.
Depends of what month you’re born and whether you’re still working and how much you’re making. Basically, if you’re making $60,000 per year working, and your birthday is in July or earlier, you should take Social Security starting in January of the year you turn 66. That way you will get your benefits without losing $1 for every $3 you earn working. Yes, your Social Security is reduced by 6 2/3 %/month forever, but you’ll have collected far more in benefits in that six months than you’ll lose(until you’re in your mid-70s. Then you are behind about $125/month over what you would have collected by waiting until the month you turn 66.
Sorry if that sounds confusing, but knowing those first things(birthday and how much you make still working) are the keys).
I don’t think this is true. If you delay your retirement past your full retirement age, your amount is increased by a small percentage for each month you delay. At least that’s what it says on the pdf you linked to. That increase is unconnected to any earnings you have and is based solely on your delayed retirement.
So you think (or have heard) that if you get an amount before the cola it will be more after the cola than if you had simply waited. Even if that were true, collecting even a single month’s benefit would put your break even point for that strategy way in the future.
However, I really don’t think it is true anyway. Back in the 70’s and 80’s I was a claims authorizer for SSA and I don’t recall ever having heard anything like this. If there is a difference it would likely be a rounding error. I am not 100% sure of this, but it is unlikely to be a substantial amount. I suspect someone saw a difference and that difference was due to the delayed retirement credits I mentioned elsewhere. Your amount will always grow if you wait to collect it.
Some inaccuracies in prior posts. If you elect to draw benefits before your full retirement age (which will eventually be 67, but I think it is 66 now) there will be an offset of 5/9 of 1% for each month that you receive benefits before full retirement age. If you have attained full retirement age, there is no offset for substantial gainful activity earnings. In other words, you do not have to be “retired.” For every month after the month you defer benefits after reaching full retirement age, your benefits will be increased by 5/9 of 1% until you attain age 70, after which there is no further increase. If you do elect to take early benefits, there will be offsets depending upon your earnings. In other words, you have to be retired to take early benefits unless you are willing to suffer the offsets.
Before starting SS benefits, consider your tax situation.
If you or a joint filer have earned or other taxable income, it does not take much to push over the line where as much as 85% of your SS check will be taxed.
Yep, but it’s taxed at normal income rate. But, you’re correct. If the retiree is still working and doesn’t need the extra money, let it ride.
That was kind of what I was thinking. But trying to figure out is it truly worth it to wait. Have a meeting in the SS office Monday.
At 66+ I am past retirement age.
I took my SS about 30 seconds after I turned 66.
While it is considered best to wait until you are 70, I chose to take it at 66 because I thought what a terrible death-peeve I would have if I didn’t get any of my money back. Now I’m 70 but I have to live until 74 to break even. That doesn’t include any interest. That takes me to 81 to feel like I made a good investment.
11 more years of being old. That’s depressing.
If this has any bearing on the question—apply about two months before you expect to actually draw it. The application has to be processed and then they hold it back a month, for whatever reason.
One interesting option for a married person the OP’s age is to apply for SS, delay taking benefits, but get 1/2 of your spouse’s benefit. This allows you to “build up” your final SS benefit while still getting some money. Who does what depends on relative age, who made more, etc.
The people at the SSA are really the experts at maximizing your SS benefit. Schedule an appointment and go in and talk to one of their advisors.
Signed up Monday.
Had 3 choices
- start retro to my 66th birthday
- Start retro to January this year
- Start October this year when I retire.
Op 2 vs op 1, I would get $49 more a month by making the start date January. But give up over $7000 in retro pay. That is over 10 year buy back. and part will be at inflated money.
Op 3 vs op 1, I would get 50 more a month with no retro.
I descided to take op 1.
Thanks for the input.