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When Should I Start Social Security Benefits?

This decision could be one of the most important you’ll ever make

Your Social Security Mailbox questions answered

Adam Voorhes

When to claim Social Security benefits is an important decision that affects your income in retirement.

En español | Q: At what age should I start my Social Security retirement benefits?

A: Decisions, decisions, decisions. For many people, when to claim Social Security is one of the most significant choices they will ever make. The timing of the first check affects how much they'll get from Social Security and what benefits will be available for spouses, children and, eventually, survivors.

If you're now trying to make that decision, here are some things to think about.

Social Security lets you begin your payments as early as age 62, as late as age 70, or any time in between. The longer you wait, the larger your monthly payments.

To get started, ask yourself, "How long do I expect to live?" That's an important financial question because if you plan to wait until 70 for your benefits but you die at 66, you will have gotten nothing. But if you wait until 70 and then live to 86, you'll be ahead of the game.

How can you figure how long you'll live? One obvious consideration is whether you already have a serious disease. If you're healthy, check the ages that your parents, siblings and other family members lived to — and use the average as a yardstick. Longevity is genetic to some extent.

You can also consult the online Social Security Life Expectancy Calculator. It will ask you whether you're male or female and the date of your birth and then tell you how much longer people like you live, on average.

For instance, a man born on Nov. 8, 1956, can expect, on average, to live an additional 26 years until about age 83. A woman of the same age can expect, on average, to live an additional 28.8 years until about age 85.8. Women generally tend to outlive men.

Regardless of your likely life span, you'll also want to consider how much money you have now. If you're destitute at age 62, it makes sense to begin benefits. If you're doing all right financially, consider putting it off. Your savings may eventually run out; Social Security payments will run for the rest of your life, regardless of how long that may be.

Q: What is full retirement age (FRA) and why is it important?

A: Your FRA is the age at which you become entitled to your full Social Security retirement benefits based on your lifetime earnings. Your FRA depends on your birthday. People born between 1943 and 1954, for instance, reach full retirement age at 66. For people born later, it will inch up, reaching 67 for people born in 1960 and after.

If you choose to start benefits early, Social Security will use your FRA to compute the reduction in the monthly amount. For instance, if you're due $1,000 a month at full retirement age, you would get only $750 a month at 62, a 25 percent drop. You should know too that it's possible to collect more than your "full" benefit. If you delay after age 66, you'll get an 8 percent increase for each year you wait until age 70. That's a potential increase of 32 percent. At that point the benefit tops out.

Here's a handy rule of thumb. When you take benefits early, you get smaller payments for a longer period. When you take benefits late, you get bigger payments for a shorter period.

This chart shows benefits and early benefits reduction by year of birth.

Q: What happens if I keep working after I take my benefits?

A: If you're between 62 and FRA, you'll face an annual earnings cap. In 2013, it's $15,120. If you earn more than that during the year, $1 in benefits will be withheld for every $2 you make over the limit. If your earnings are high enough, all of your benefits could be withheld. Another formula kicks in during the calendar year in which you reach FRA. But the earnings limit goes away when you hit that age. After that, your monthly payment will be recalculated upward, so as to return your "lost" benefits over time.

Q: I'm planning on delaying benefits. Do I need to tell Social Security now?

A: No. Just wait until you're ready to start and then apply. You can sign up online, by telephone at 800-772-1213 (TTY 800-325-0778) or in person at your Social Security office. Go to this website to find out what documentation you'll need.

Stan Hinden, a former columnist for the Washington Post, wrote How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire. Have a question? Check out the AARP Social Security Question and Answer Tool.

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