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5 Questions to Ask Yourself Before Drawing Social Security



If you’re nearing age 62, you might be thinking about taking your Social Security retirement benefit as soon as possible. Or, if you’re 62 or older but haven’t hit your full retirement age yet, you may be considering taking your Social Security benefit sooner than you planned due to job loss, health issues, or another life crisis.

Before you sign up for Social Security, however, it pays to ask yourself important questions so you can choose the right time to begin drawing Social Security for your financial situation.

Ask yourself the following five questions before drawing Social Security retirement benefits…

1. What is my full retirement age?

Most people are eligible to begin drawing Social Security retirement benefits at age 62, but that doesn’t mean you should rush to collect as soon as you can. Sure, you can get a monthly Social Security benefit before your full retirement age, but at age 62 the amount will be reduced by around 30% less than if you waited until your full retirement age.

Your full retirement age depends on the year you were born. For example, if you turn 62 in 2021, your full retirement age is 66 and 10 months. If you were born in 1960 or later, your full retirement age is 67. To find your full retirement age, visit the SSA’s retirement age calculator.

Find out: 6 Crucial Dates for Retirement Planning

2. What is my estimated monthly benefit?

Before drawing Social Security, make sure you understand how much you can expect each month, depending on when you begin taking the benefit. Remember, the benefit you begin with will stay the same for the rest of your life, with the exception of only a small annual cost-of-living (COLA) increase. For example, in 2021, Social Security recipients received a COLA adjustment of 1.3% on their benefit.

Use the SSA’s Retirement Benefits Estimator to get an estimate of how much your monthly Social Security benefit will be if you start drawing benefits at age 62, your full retirement age (66 and ten months if born in 1959, age 67 if born in 1960 or later) or at age 70. To find out your monthly benefit if you begin drawing benefits at another age between 62 and 70, sign up for a my Social Security account and use the slide bar on the my Social Security Retirement Calculator for the estimated benefit.

Once you know the benefit you’d receive at each age, you may find that waiting a couple of years longer than you’d like is a better option for your retirement financial situation.

3. What will my benefit be if I wait until age 70?

Most people don’t want to wait until age 70 to start drawing Social Security, but if you do wait, you’ll receive the maximum benefit amount, which is significantly more than you’d receive at your full retirement age.

For example, if you were born in 1959 and start receiving your Social Security benefit at your full retirement age of 66 and 10 months, you would get 100% of your monthly benefits. However, if you wait until age 70 to begin drawing Social Security, you would receive 125.3% of the monthly benefit because you delayed getting Social Security benefits for 38 months.

Find out: Consider These 6 Reasons to Delay Retirement

4. Are my earnings recorded accurately?

How much you receive for your Social Security benefit is based on your earnings over many years. So, if the SSA has an inaccurate record of your earnings for any years, the error could lower your monthly benefit amount. If you find inaccuracies, contact the SSA at 1-800-772-1213 to correct your Social Security earnings record.

You may not be able to correct the earnings amounts listed if it’s been more than three years, 15 months and 15 days from the end of the taxable year when the wages were paid. Under certain circumstances, however, you may still be able to correct your record after that period.

5. Do I plan to work while drawing Social Security?

If you begin taking Social Security before your full retirement age, you have an earnings threshold. If you go over the annual earnings limit, the Social Security Administration (SSA) reduces your monthly benefit amount. In 2021, the annual earnings limit is $18,960. If you earn more than the annual earnings threshold, the SSA will reduce your monthly benefit by deducting $1 for every $2 you earn above the annual limit.

In the year you turn full retirement age, during the months leading up to your birthday, the SSA would deduct $1 for every $3 you earn over a different limit from your benefit. The limit in 2021 is $50,520. Once you reach full retirement age, there isn’t a threshold on earnings, so you can earn as much as you like while drawing Social Security.

If the SSA deducted from your benefit because you earned too much while drawing Social Security, the SSA will recalculate your benefit after your full retirement age, crediting the deducted amount.

Find out: 7 Reasons to Work Part-Time in Retirement

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