Upon first glance, the process of applying for Social Security retirement benefits can appear strenuous or complicated. While the history of Social Security is complex and it has undergone numerous changes and expansions, many people remain most concerned about two common questions: “How do I get started?” and “When should I apply?” While these questions can result in widely varying answers based on an applicant’s circumstances, there are some general guidelines that can be helpful for most people.
How to Apply
The how is fairly straightforward. There are multiple ways to apply: you can set up an appointment in person, over the phone, or use the Social Security Administration’s online service. The SSA’s online application is a popular method because it conveniently saves a trip lugging documents to an office, and reportedly can be completed in as little as 20 minutes. No matter which method you choose, it’s important to make sure that you have as much information as possible ready in advance in order to help streamline the process. AARP notes that information about “your recent earnings, marital history, military background, whether you qualify for a federal pension, and possible eligibility of any family members for Social Security benefits based on your own work record” is typically needed to apply for retirement benefits. There are several key documents and pieces of information about you and your work history that the SSA will need in order to move forward, including your:
- original birth certificate or other proof of birth
- proof of U.S. citizenship or lawful alien status
- a copy of U.S. military service documents, if any
- a copy of W-2 documents
- self-employment tax return, if any
Additional information required by the SSA may vary, and is sometimes determined as you move through the application process. If it’s found during this process that you need documents that you don’t currently have on hand, the SSA can help in locating them.
When to Apply
The more difficult question is when to apply. The first thing that should be considered is your age and when you plan to retire. There is no one-size-fits-all age that grants the same benefits for everyone, but there are some guidelines that can help identify the when that’s right for you. The Social Security Administration notes that in regards to collecting retirement benefits, people may retire between the age of 62 and 70. However, the benefits received before reaching your Full Retirement Age (FRA) will typically be less than if you wait to collect until you reach your FRA. As CNBC notes, choosing to delay collecting retirement benefits has the potential to “significantly boost your guaranteed lifetime income in retirement. You are still able to take your benefits beginning at age 62 if you choose, but you will get a much reduced rate.” In this time window, there’s varying reduction amounts that occur based on the age you choose to start collecting benefits. The SSA offers an informative chart that lays out the reduction amounts according to age, which is a valuable resource to get a general idea of what payments will look like.
After reviewing and determining the age of retirement that best works for you, the SSA advises that applicants should begin the process no later than four months before they wish to begin receiving benefits.
Other Considerations to Remember
While friends and family are often helpful sources of guidance and support, it’s important to keep your own unique circumstances in mind and avoid simply following a path someone else has taken. A strategy that has worked for one person may not work for another, and there are many factors in play such as birth year, work history, pensions, marital status, anticipated life expectancy, and family members. If you have a financial advisor who is knowledgeable about your situation, they will likely be able work with you to review your options. At New England Investment and Retirement Group, we recommend extensive consideration of these factors as well as continued dialogue with a trusted financial planner.