Three things to know about social security benefits

As of spring 2017, more than 40 million retired workers were receiving monthly Social Security benefits. Most of them were relying on Social Security for more than half their income.

The Social Security Administration determines your full retirement age based on your birth year. For example, the retirement age is 66 for people born in 1945, 66 and two months for people born in 1955, and 67 for people born in 1960 or later.

But you don’t have to wait until your full retirement age to claim your benefits, nor do you have to start collecting the minute you reach it. Here are a few things to keep in mind as you prepare to apply for Social Security:

1. Look into your spousal benefit. It may be a good idea to apply for a spousal benefit rather than one in your own name as primary earner. This is worth examining if the overall earnings of your spouse or ex-spouse were higher than your own. (Note: Benefit payments to a spouse or ex-spouse do not affect the amount paid to the primary earner.

2. “File and Suspend” has ended. The Social Security Administration no longer allows you to “file” for benefits as soon as you reach retirement age and “suspend” claiming them until later. However, the so-called “Restricted Application” lets your spouse, if he or she has reached full retirement age, apply for benefits and start collecting them. One of you can apply for the spousal benefit while the other delays applying for Social Security and amasses delayed retirement credits that will increase the benefit once it is collected.

3. Later is better. The Social Security Administration allows you to retire — and claim your benefit — any time after you reach age 62. However, your monthly payment at 62 may be as much as 30 percent lower than it would be if you had waited until you reached full retirement age. A $1,000 monthly retirement benefit, for example, would drop to as low as $700, and a spouse’s $500 benefit would fall to $325. On the flip side, benefits increase for each month you work past full retirement age until you reach age 70.6

Given that fewer retirees are receiving defined benefit pensions, Social Security has become an important shield that helps protect retirees from market volatility, low interest rates on savings accounts, and the worry of outliving savings. A qualified professional can help ensure that you make the most of the Social Security benefits you have coming to you.

This educational, third-party article is provided as a courtesy by Zachary Barton, Barton Financial group, LLC, Agent, New York Life Insurance Company. New York Life is not owned or operated by Barton Financial Group, LLC.

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