Shelley EIf retirement’s on the horizon, thoughts of applying for Social Security benefits will probably begin to pop into your head. Before you start the application process, here are some things you should know.
When To Apply for Social Security
Figuring out the ideal time to apply for Social Security can be a bit complicated. Add in the fact that as much as 85 percent of your benefits can be taxed, and making your move becomes even more complicated. For this reason, you may want to solicit the help of a tax planner or advisor before applying for benefits. They can explain the tax implications and other aspects of Social Security, so you apply at the right time.
If you’d like to receive the maximum benefits, you’ll need to wait until your full retirement age is reached to start collecting payments. The Social Security Administration sets this age according to your birthdate.
If you file for benefits before your full retirement age, you could receive less money each month. Since the reduction in payment could be substantial, be sure to know how much you’ll be penalized for early filing.
Again, an advisor can help here should you find the process to be too confusing.
On the flip side, waiting longer to receive benefits can result in higher monthly payments. For instance, if your full retirement age is 66, waiting until 70 to collect payments can result in receiving 132 percent of the maximum benefit. This increase is why some seniors choose to wait as long as they can to start collecting payments.
Once you’re ready to apply, know that Social Security payments do not start instantly. As a general rule, you should file for benefits a minimum of two months before you want to receive payments. So, if you’d like to receive your first payment in March, apply in January.
How Much You’ll Receive
The amount of your Social Security benefits will depend on your annual earnings history. The Social Security Administration uses a formula to determine this amount, and it includes the 35 years where you earned the most income.
If you never worked, you can still qualify for benefits using another person’s work history, such as your ex-spouse or spouse.
Applying for Social Security
You’ll need several documents to apply for benefits, such as your:
- Birth certificate
- Proof of citizenship
- Social Security card
- Tax forms from the previous year
- Military service records (for service prior to 1968)
- Banking information so you can receive deposits
If you’re applying for spousal benefits, you’ll also need your spouse’s Social Security number and their date of birth. Any marriage, divorce, or death certificates will also be required.
With all of your information ready, you can apply for Social Security at a local office. You can also apply via phone by calling 800-772-1213 on Monday through Friday between 8 am and 7 pm. Lastly, you can click here to apply online.
After you apply and submit your application, wait for a response in the mail. You can also check your application status online via your “My Social Security account” or by calling 1-800-772-1213.
Mark Luigi
