A Few Reasons to File for Social Security at Full Retirement Age

Chances are you are already thinking about Social Security if you were born in 1960 or earlier.

You are also aware of articles all over internet about when it’s best to sign up and start taking your retirement benefits.

As someone who has taught workshops about Social Security for years, I can tell you that absent extenuating circumstances, you should try and find a way to wait unti your Full Retirement Age, or FRA. (The Social Security system loves acronyms…) I don’t plan to reinvent all those reasons here, but to report at least 3 solid reasons for you to wait until your FRA.

While the system has had numerous tweaks over the years, the last serious fundamental changes were made in 1983. The system was running out of money. It was recognized that it had already become a critical element for Americans entering retirement, and a political will emerged that resulted in more money flowing into the system so it could remain viable for another 50 years.

As we anticipate the 2020 elections, we need to pay attention to what candidates are saying about the need for another revision. I’ve written on this before and only encourage you here to search for those earlier blog posts.

There’s a strong temptation to file early and watch those checks arrive in your bank account every month. But if you realistically expect to live into your 80’s and beyond, you’re cutting your ability to pay your bills when you file early.

There’s an 8 year or 96 month window to choose from. And since none of us has a crystal ball, we can only hope to guess right. But with so many of us feeling uneasy about the amount of money we’ve saved over the years, having a bigger Social Security benefit could mean the difference between panic and a normal life.

Right in the middle of that eight-year window is your FRA. That age is a function of the year you were born, as follows:

Year of Birth Full Retirement Age
1943-1954 66
1955 66 + 2 months
1956 66 + 4 months
1957 66 + 6 months
1958 66 + 8 months
1959 66 + 10 months
1960 67

The size of your check is a function of your work history. That history probably reflects higher income amounts today than it did 35 years ago. Since what you’ll receive is determined by the average of the highest 35 years, it’s to your advantage to include those toward the end and eliminate those at the beginning.

If you take them as early as possible, you’re not only looking at a lower average number but you’re looking at smaller checks since they have to last longer. Remember they end when you die.

If you have a surviving spouse and you were the primary wage earner, or maybe just the highest wage earner, your surviving spouse will get your benefits. A early sign up may condemn them to significantly smaller checks if you were to pass first.

Once you reach your FRA, you can earn as much as you like and the Social Security Administration could care less. Ultimately, when you file for benefits depends on your life circumstances and hopefully an educated guess about when it’s best for you. Just know that in my opinion, you should find ways to wait until your FRA before you sign on the dotted line.

Tony Kendzior \ June 25, 2019