You may be inclined to file for Social Security in 2023, and as long as you're at least 62 years of age, that option should be on the table. But it's important to claim benefits when the time is right. And so you don't want to fall victim to one of these filing mistakes this year.
1. Filing for benefits without knowing your full retirement age
Your full retirement age (FRA) is when you're eligible for your full monthly Social Security benefit based on your personal earnings history. FRA is either 66, 67, or somewhere in the middle, depending on the year you were born.
As mentioned, you're allowed to sign up for Social Security as early as age 62. But for each month you claim benefits before reaching FRA, they get reduced on a permanent basis. So it's important to know what your FRA looks like before signing up for Social Security.
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You should also know that if you delay your filing past FRA, you'll get a chance to permanently boost your benefits for doing so. You can accrue delayed retirement credits up until age 70 that raise your benefits.
This table will tell you what your FRA looks like. Be sure to commit that number to memory before filing your Social Security claim.
|
Year of Birth |
Full Retirement Age |
|---|---|
|
1943-1954 |
66 |
|
1955 |
66 and two months |
|
1956 |
66 and four months |
|
1957 |
66 and six months |
|
1958 |
66 and eight months |
|
1959 |
66 and 10 months |
|
1960 or later |
67 |
Data source: Social Security Administration.
2. Filing for benefits before assessing your savings
If you have a larger nest egg, you may be in a position where you can afford to file for Social Security ahead of FRA. Your benefits will be reduced in that scenario, but if you're sitting on a few million dollars, that may not hurt you financially. And getting your benefits sooner might allow you to do things like travel at a younger age, when you're apt to have more energy for it.
On the other hand, if you have a smaller amount of money saved, it could pay to delay your Social Security filing and score a larger monthly benefit. That could help compensate for less generous withdrawals from your retirement plan.
Either way, it's important to assess your savings before claiming Social Security. That way, you'll know how much income you really need from the program.
3. Filing for benefits without consulting your spouse
If you're married, any major financial decision you make with regard to retirement is one you should run by your spouse. And that extends to claiming Social Security.
Your spouse may want you to delay your filing so you can both enjoy a higher income stream throughout retirement. Or, they may encourage you to claim Social Security ahead of FRA so you can both retire early. Have that conversation so you don't make a poor financial decision -- and you don't incur the wrath of the person you share a life with.
Filing for Social Security is not a decision to rush into or take lightly. Avoid these mistakes at all costs so you don't wind up claiming your benefits at the wrong time and then kicking yourself after the fact.
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