When it comes to Social Security planning, many people simply don’t understand how their benefits work. And once you file and start collecting Social Security, in most cases you cannot undo your choices. At its most basic, timing is your biggest decision. Most people can start collecting Social Security retirement benefits beginning at age 62 as long as their work record or a spouse’s has accumulated enough hours to qualify through the years. This may make sense for some people, particularly those in ill health or people who have lost their job or income source. However, by doing this, you could be leaving an estimated 25 – 30% of what you could have collected had you waited until your full retirement age.
Full retirement age, or FRA, is age 67 for most people, depending on the month and year you were born. If you can wait from your FRA another three years, until age 70, your full retirement age benefit will grow by an additional 8% annually. After age 70, it no longer increases, so most people should file at age 70 at the latest.
