3 Tips When Applying For Social Security Benefits
I recently received a great reader question, the reader is about to turn 70 on July 15th of this year. He’s been waiting to collect his full Social Security benefit and has started the application process. However, he wasn’t sure when exactly he should start his benefits. This is one of those key questions that Social Security asks when you apply, and it's something many people get confused about. So, in this blog post, I’ll address three important tips for applying for Social Security.
Tip #1: Apply Online
If you're ready to apply for Social Security, my first tip is to apply online. This is actually the method recommended by the Social Security Administration (SSA). It’s easier, more convenient, and helps streamline the process. To get started, head over to ssa.gov. Once you’re there, you’ll see options at the top of the page where you can either "Sign Up" or "Sign In." If you don’t have an account with Social Security, it's a good idea to create one. Even if you’re not yet close to retirement, having an account lets you check your benefit statements, view estimated retirement amounts, and access a wealth of other useful information. I personally created my online account years ago (even though I’m about 16 years away from 62), and it’s incredibly helpful.
To create an account, simply click "Sign Up." If you already have an account, just log in. Of course, you can also choose to call Social Security at 1-800-772-1213 or visit a local Social Security office to apply in person, but online is the quickest and easiest option.
Check out this week’s episode on: 7 Ways to Maximize your Lifetime Social Security Benefits
Tip #2: When to Begin Benefits
This brings us to the next question —when should I begin my benefits? It’s a great question and one that causes confusion for a lot of people. When you apply for Social Security, they ask you which month you want your benefits to start. Here's the thing: you can apply for benefits at any time between age 62 and 70.
It’s easy to think that you can only apply at specific milestones (like 63 or 64), but that’s not the case. You can apply for benefits anytime during that window, and they’ll be prorated each month. If you decide to apply before your full retirement age (which is between 66 and 67 for most people), your benefit will be reduced by a small percentage each month.
On the flip side, if you decide to wait until after your full retirement age, you’ll earn an 8% credit per year—up until age 70. This means that the longer you wait, the higher your monthly benefit will be.
I give you a lot of credit to this reader for waiting until 70. I’m a big believer that, especially if you're the higher-earning spouse or a single person in good health, waiting until 70 is usually the best choice. Why? Because you’ll get the highest possible benefit from Social Security, and if you live a long and healthy life, this could result in significantly more money over your retirement.
For our reader, since he’s turning 70 on July 15th, he would want his benefits to start on July 1st, which is when he becomes eligible. Social Security benefits start in the month that you reach full retirement age. So, even though Rick’s birthday is in the middle of the month, his benefits would officially begin on July 1st, and his first check would come in August.
Fun fact: Social Security no longer sends paper checks. They prefer to direct deposit your benefits into your bank account or credit union. If you don’t have a bank account, they also offer a Direct Express Debit Card. This card has no sign-up or monthly fees, and you can use it like any regular debit card. I’ll put a link in the show notes for more details if you’re interested in this option.
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Tip #3: When to File
Another important thing to note is that you can file for Social Security benefits up to four months in advance. So, for our reader, he could’ve filed as early as April 1st to have his benefits start in July. He’d still get his first payment in August, but by filing early, he ensured that everything was set up smoothly and on time.
Also, it’s important to know that if you’re planning to wait until 70 to begin your benefits, make sure you don’t let it go too far past your 70th birthday. There’s no additional benefit to waiting beyond 70, and the 8% increase in benefits that you get between your full retirement age and 70 stops once you turn 70.
A couple of odd Social Security rules can work to your advantage here. For example, if your birthday falls on the 1st or 2nd of the month, you technically attain your full eligibility the month before your birthday, which means you can start your benefits a month earlier. So, if our readers birthday was on July 1st (instead of July 15th), he could’ve started his benefits in June and received his first payment in July.
Likewise, if your birthday is on the 2nd of the month and you're turning 62, you could actually apply to start benefits in the previous month, giving you one extra payment. For example, if someone like John were turning 62 on March 2nd, he could apply to begin benefits in March and get his first payment in April instead of having to wait until April to apply and May for the first payment.
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Wrapping Up
In conclusion, applying for Social Security can seem overwhelming, but if you follow these steps, you can ensure a smooth process. Remember:
Apply online for a quick and easy process.
Choose the right time to start your benefits—the longer you wait, the higher your monthly payout.
File up to 4 months in advance to avoid delays.
If you have a question or topic that you’d like to have considered for a future episode/blog post, you can request it by going to www.retirewithryan.com and clicking on ask a question.
As always, have a great day, a better week, and I look forward to talking with you on the next blog post, podcast, YouTube video, or wherever we have the pleasure of connecting!
Written by Ryan Morrissey
Founder & CEO of Morrissey Wealth Management
Host of the Retire with Ryan Podcast