Here’s Why You Should Claim Social Security at Full Retirement Age — and Not Beyond

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When it comes to signing up for Social Security, you have choices. You can already claim benefits at the age of 62, or you can postpone your application until your 70th birthday. In fact, technically, you don’t to have to apply at age 70, although delaying your submission beyond that point will not benefit you financially.

In the middle of that age bracket is the full retirement age (FRA) for Social Security purposes, and it’s when you’re entitled to collect your full monthly benefit based on your pay history. Even though you have the option to claim Social Security before or after FRA, filing with your precise FRA can really work in your favor.

Image source: Getty Images.

What is your FRA?

Before we talk about why claiming Social Security with FRA makes sense, let’s make sure you know when your FRA is. That age is a function of your year of birth, and you can use this table to see what it is:

Year of birth

Full retirement age

1943-1954

66

1955

66 and 2 months

1956

66 and 4 months

1957

66 and 6 months

1958

66 and 8 months

1959

66 and 10 months

1960 or later

67

Data source: Social Security Administration.

Why register with FRA?

The advantage of waiting until FRA to claim Social Security is that your monthly benefit will not be reduced. And that’s important, because the monthly benefit that you set at the time of your application is the amount that Social Security will pay you (more or less) for life. There are cost-of-living adjustments that you qualify for, but they’re still based on the same initial benefit you’re capturing.

For example, if you claim Social Security at age 62, you will permanently reduce your monthly benefit by 25% to 30% (the exact percentage will depend on your precise FRA). And that can leave you in need of money as a senior, especially if you retire with a nest egg that isn’t as robust as you’d like.

Of course, there is also the option to defer your Social Security application after FRA. For every year you do, up to your 70th, your monthly benefit will increase by 8%.

All things considered, you have the potential to increase your benefits a lot by postponing your filing until your 70th birthday. But there is a risk of going that way, such as not living long enough to make that decision financially worthwhile.

Suppose you are entitled to a monthly Social Security benefit of $1800 at an FRA of 67. If you defer your claim until age 70, that means increasing that benefit to $2232.

But you have to live to age 82 1/2 to break into either filing scenario — in other words, to get away with the same amount of lifetime earnings. If you die before that age, you will ultimately be short of lifelong benefits by delaying your application until age 70.

A nice middle way option

While you can clearly choose from many different ages while applying for Social Security, FRA is a really nice middle ground. This way you do not reduce your monthly benefit, but you also do not wait too long to collect that money. And you may find that a very nice compromise.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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