Americans Are Clueless About Social Security’s Filing Rules, Data Shows

My Comments: This article is only meaningful to those of you who haven’t yet filed for Social Security benefits or you filed but it was less than 12 months ago.

Despite the fact that filing early more or less means you get a smaller check for a longer period of time, there are good reasons not to file early. My recommendation, barring any dramatic personal reason why you need money early, is to wait until your Full Retirement Age. That’s the month determined by when you were born, to start receiving what you’ve already qualified for.

Before you do anything, and I don’t care if you are still in your 20’s, go to SSA.GOV and create an account. Yes, I know you don’t want to be tracked by the government, but chances they already know about you. That’s because if you’re working somewhere or paying income taxes, you’re already paying into the system. At least you should be.

Suppose your employer makes a mistake and the money that was held from your paycheck got credited to someone else. You can check and make sure it’s in your account. If you discover a mistake, it’s not easy to get it corrected if you wait too long. Like discovering it ten years from now and your employer has gone out of business.

Just do it; open an account at SSA.GOV and slowly get rid of your cluelessness. Is that a real word?

By Maurie Backman \ September 4, 2019 \

Millions of seniors rely on Social Security to cover their living costs, and today’s workers will likely join their ranks once they retire. But a big part of maximizing those benefits is knowing when to file for them.

Unfortunately, Americans are lacking some serious knowledge in this regard. In a recent GOBankingRates survey, respondents across a wide range of ages were asked whether seniors can start collecting Social Security as early as age 60 and as late as age 72. Around 39% of respondents said yes, that’s correct, while 37% said they had no idea. Only 24% knew that that time frame was off by two years on each side of the filing equation.

If you’re not aware of Social Security’s filing rules, it’s imperative that you get schooled on that information. Otherwise, you’ll throw off your retirement planning and risk missing out on income that could otherwise be yours.

Filing for benefits: How it works

Your Social Security benefits are calculated by applying a formula to an inflation-adjusted average of your 35 highest years of income. Once your monthly benefit amount is established, you’re entitled to it upon reaching full retirement age. That age is dependent on your year of birth, but it’s somewhere between 66 and 67.

Meanwhile, you’re allowed to file for Social Security beginning at age 62 — but not at age 60. The only exception is if you’re claiming survivors benefits based on what your deceased spouse collected. But you can’t claim your own benefits until age 62.

That said, for each month you claim benefits ahead of full retirement age, you’ll reduce them by a certain percentage. The maximum reduction you’ll face by filing at age 62 is 25% if your full retirement age is 66, and 30% if that age is 67. And whatever hit you take on your benefits will remain in effect for the rest of your life unless you manage to withdraw your Social Security application within a year and also repay every dollar you collected.

Of course, if you file at a later age than 62, you’ll face a lower reduction. For example, if you choose to file at 65 and your full retirement age is 66, you’ll lose just 6.67% of your benefits. If you file at 65 when you full retirement age is 67, you’ll lose 13.34%.

On the flip side, you’re allowed to delay benefits past full retirement age. For each year you do, you’ll accrue credits that boost your benefits by 8%. This incentive, however, is only applicable until you turn 70. This means that if your full retirement age is 67, the maximum increase you can snag is 24%.

Furthermore, while the Social Security Administration won’t force you to take benefits at 70, there’s no financial incentive to wait past that point. In fact, if you wait until age 72 — the age referenced in the aforementioned survey — you’ll lose out on 18 months’ worth of Social Security income. That’s because the agency will pay you up to six months’ worth of retroactive benefits, but not more.

Know the rules

Filing for Social Security at the right time can help ensure that you make the most of those benefits in retirement. That’s why it’s important to understand how the program works. If you’re pretty much in the dark about Social Security, take some time to learn more about it so that you can make the best decisions for your golden years.