4 Myths About Your Social Security Filing Age

4 Myths about Your Social Security Filing Age

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Social Security is a key source of income for millions of retired seniors. If you are confused by the advice some people offer about what Social Security can and will deliver, this article will help you.

Here are some of the most common myths and misconceptions, along with explanations that set the record straight:

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1. You Should Always Delay Your Social Security Filing Age. Fact: There's no "right" age to claim benefits; it mainly depends on your financial situation. You can claim benefits at any point between the ages of 62 and 70, but if you claim your benefits early, it will lower your monthly paychecks and overall lifetime benefits. If you wait until full retirement age (FRA) - usually either 66 or 67, depending on when you were born — you get 100 % of the benefits you're entitled to. Â

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2. You Will Increase Your Benefits by 8% for Every Year You Delay Filing.

Fact: You may increase the amount you receive by up to 8% each year if you delay taking benefits beyond your full retirement age. But the yearover-year benefit differences are not always 8%, and often the difference is much less.

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3. The Break-Even Point is 80 Years of Age. Fact: The break-even point is the age at which your lifetime payment amount (total benefits) would be equal, whether you claim Social Security early or late. The age at which you will break-even generally ranges from 77 to 83, depending on when you start receiving benefits. If you live beyond the break-even point, you would come out ahead by waiting to receive benefits.

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4. The Break-Even Point is the Most Important Consideration.

Fact: Other considerations play a role in making a good decision about benefits. If you claim social security early and continue to work, your benefits could be reduced and taxed at higher rates. And, think twice about benefits if you are married. Starting benefits early can also reduce your spouse’s benefits if he/she claims benefits based on your work record.

Married couples, where each spouse is entitled to benefits based on his/her work record, should also consider the timing of receiving those benefits individually and as a couple.

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Bottom Line: No guesswork. Run the numbers to make an informed decision about the best time to receive your earned benefits.

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