Ask These Questions Before Claiming Social Security

Like most people, you will count on Social Security to provide a part of your income in retirement. But signing up for benefits is generally a bit more complicated than most people think, and there will be plenty of opportunities to make mistakes. Before you claim your benefits, make sure you’ve asked and answered these questions.

Do you have enough work credits? The idea that all people will someday become eligible for Social Security is a myth. Most will, but you do need to accumulate 40 work credits before you can claim benefits. Currently workers receive one credit for every $1,320 of taxable earnings each year, up to four credits per year. However, credits were defined differently in the past, so check with Social Security to learn how many credits you’ve accumulated on your record. And on that note…

Ask for a copy of your earnings record. Your exact benefits amount will be calculated according to your 35 highest-earning years. But because the Administration can make mistakes, you should check your work record for costly errors. Report any discrepancies right away, so that they can be corrected.

What is your “full retirement age”? This is the age at which you will claim your full scheduled benefits, and it differs from one person to the next according when you were born. Since the time of your retirement relative to your full retirement age will affect your monthly benefit amount, make sure you have this information.

Investigate your spousal benefits. Even if you’re divorced, you can receive spousal benefits as long as you were married at least ten years, and you’re not remarried. Sometimes the spousal benefit is greater than your own benefit (because your ex spouse earned more money). In that case, it might be smart to claim spousal benefits instead of your own.

Learn about taxes on Social Security benefits. For some people, who earn substantial income above certain thresholds, benefits can be taxed. You will need a dependable estimate of your benefits before you can make a decision about retirement.

For more information on retirement income planning, give us a call. We can help you answer the important questions, so that you fell well prepared for this next stage in your life.