By Rusty Gloor, National Social Security Advisor at the AMAC Foundation, the non-profit arm of the Association of Mature American Citizens
Dear Rusty: I will be turning 65 this December and will most likely continue working until July of 2024 at my current job. It is possible I could leave a year earlier. With that being said, when should I submit paperwork to start collecting Social Security benefits? Is there anything I should know previous to applying that will make sure the process is relatively seamless? Signed: Ready to Retire
Dear Ready to Retire: Social Security recommends you apply for benefits 2 to 3 months before you wish your benefit payments to begin, but you can apply up to 4 months prior. When you apply, you will specify your desired benefit-start-month on the application, and that is when your benefits will start. Be aware that Social Security pays benefits “in arrears,” meaning your benefit is paid in the month following the month earned. So, for example, if you apply for your benefits to start in January your January benefit will be paid in February.
The exact date of your payment depends on the day of the month you were born – born between the 1st and 10th of the month, you get your payment on the 2nd Wednesday; born between the 11th and 20th of the month, payment is made on the 3rd Wednesday; born after the 20th of the month your payment will be received in your bank account on the 4th Wednesday of every month.
You can apply in person, either over the phone or by visiting your local Social Security office, or you can apply for your benefits online at www.ssa.gov/retire. Applying online is, by far, the most efficient method. To apply online, you will first need to set up your personal “my Social Security” online account which is easy to do at www.ssa.gov/myaccount. I suggest you create your online account now, even if you don’t plan to claim your SS for a while yet. Once you have your online account set up, you can see your estimated benefit amounts at different ages, which can help you decide when to claim.
Since you are still working, you should be aware that if you claim at any time prior to reaching your full retirement age (FRA) you will be subject to Social Security’s earnings test. If you will be 65 in December 2022 your FRA is 67, and that is the point at which you will get 100% of the SS benefit you’ve earned from a lifetime of working. If you claim any earlier, your benefit will be permanently reduced, and the Social Security “earnings test” will apply. The earnings limit for 2023 will be a bit more than the 2022 limit of $19,560. If you are collecting SS and exceed the earnings limit, they will take away benefits equal to $1 for every $2 you are over the limit. In the year you reach your FRA (2024) your earnings limit will be about 2 ½ times more than the normal annual limit and the penalty is less, and once you have reached your FRA there is no longer a limit to how much you can earn. For clarity, you can also wait and claim after your FRA and gain a higher benefit (your benefit will grow up to age 70).
So, how can you make the process “relatively seamless?” Create your online “my Social Security” account in advance and verify that your lifetime earnings as recorded by Social Security are accurate. Then, when you’re ready to claim, simply go to www.ssa.gov/retire and follow the instructions. The online application process is quite intuitive, and you should have no trouble even if you have limited computer skills. Social Security will contact you if they need more information after you apply online. Of course, you can also apply whenever you’re ready by calling Social Security to make an appointment to apply over the phone but applying online is much more efficient.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.