(Molly Bachman)
If you turn 62 or older in 2023, you have the option to sign up for Social Security. But even if you don’t plan to apply for benefits next year, it’s still going to cost you money to work on these important Social Security tasks next month.
1. Know your retirement age
Many end up receiving lower monthly benefits than they were originally eligible for Social security Because they sign up before full retirement age (FRA). In some cases it is intentional.
However, many people don’t know their FRA and accidentally reduce their monthly benefits. that’s a problem.
Image Source: Getty Images.
People are also reading…
Your FRA depends on the year you were born. You can use this table to see what yours looks like.
|
year of birth |
full retirement age |
|---|---|
|
1943-1954 |
66 |
|
1955 |
66 years and 2 months |
|
1956 |
66 and 4 months |
|
1957 |
66 and 6 months |
|
1958 |
66 months and 8 months |
|
1959 |
66 months and 10 months |
|
1960 onwards |
67 |
Data Source: Social Security Administration. Chart by author.
Note that you don’t necessarily have to claim Social Security with your exact FRA. In some cases it makes sense to file before the FRA. You can also delay submission past the FRA.
For each year you do, up to 70 years old, an 8% increase in monthly rewards. However, it is important to know the FRA so that you can strategically plan your Social Security claims.
2. Check your income statement
Each year, the Social Security Administration (SSA) issues workers an income statement summarizing wages. It’s important to read your income statement carefully, as an underreported salary could result in less monthly Social Security benefits in the future.
If you are over 60, you will receive an income statement by mail.If you are young, you should create an account at SSA website Access there.
The income statement not only summarizes wages for the year, but also includes an estimate of future monthly Social Security benefits. And that’s an important number to know.
Of course, the closer you are to retirement, the more accurate that estimate will be. However, even if you are young and know that your estimates may change based on future earnings, it’s still useful to have a baseline.
3. Start thinking about when to apply
If you’re in your 20s, 30s, or 40s, this is probably a move you can skip. But if you’re within 10 years of retirement, it’s actually a good time to start thinking about Social Security application age. Because that decision determines the monthly income that the program offers.
If you are married, this is the conversation you want to have with your spouse. That way you can tweak and come up with some options that work well together.
At this stage of the year, you may be more focused on holiday shopping than on your household budget. But it is worth taking the time to address these Social Security challenges before 2022 draws to a close. This is especially true if you believe you will be claiming benefits in 2023 or shortly thereafter.
The $18,984 Social Security Bonus That Most Retirees Completely Overlook
If you’re like most Americans, retirement savings are years (or more) behind. But knowing a few lesser-known “Social Security secrets” can definitely boost your retirement income. For example, one simple trick can pay you $18,984 more each year. I believe that once you learn how to get the most out of your Social Security benefits, you will be able to retire with peace of mind and confidence. Click here for more information on these strategies..
The Motley Fool has Disclosure policy.
