I am always getting emails from readers who are so hung up on making sure they start their Social Security benefits at their full retirement age. They don’t want them a month before. They don’t want them a month after. They want to make darn sure that their benefits start at their full retirement age. And they almost seem to be losing sleep making sure this is going to happen.
They send me emails asking me, almost begging me, to help them make sure they select the right date.
I always want to tell these guys (and it seems to be always guys) to chill out. Don’t worry. Be happy! You will probably pick the right date. But even if you don’t, guess what? The earth will keep spinning, and the sun will come up tomorrow. And you will not be making a huge mistake that will affect your benefits for the rest of your life. I will explain what I am talking about in a minute.
But first, let me go over the ground rules. They are really simple. (By the way, I’m going to use the word “simple” several times in this paragraph. That’s because I’m trying to emphasize how simple it is.) If you want benefits to begin at your full retirement age, then you simply indicate the month you reach your FRA as your starting month on your Social Security retirement application. So if your full retirement age is age 66 and two months, and you will be age 66 and two months in September 2021, then you simply indicate September as your starting month. It’s so simple!
Some people over think this. For example, they know that Social Security checks come one month behind. In other words, the September 2021 Social Security check is paid in October. So if a guy turns FRA in September, he thinks too hard, and he puts October as his starting month. But the Social Security application question isn’t asking you which month you want your check to show up in your bank account. It’s asking you which is the first month you want to be eligible for a Social Security check.
One little bit of clarification. Social Security eligibility always goes by month, not by days. For example, if you were born on Sept. 21, 1955, meaning your full retirement age is 66 and two months, and that’s when you want your benefits to begin, you don’t indicate Nov. 21, 2021 as your eligibility date. You simply indicate November 2021.
So to repeat once again. If you want benefits to start in the month you reach full retirement age, then SIMPLY indicate that month as your starting month on the application form.
Some guys have told me that they are afraid to file for benefits early because they are worried sick that they will get benefits before their full retirement age. For example, Bob and I recently had a back and forth email exchange. He was born Aug. 14, 1955. His full retirement age is 66 and two months. And he wants to make sure his benefits begin at his FRA, which would be October 2021. He asked me when he could file for benefits. I told him he could start the ball rolling now already. But then he said he doesn’t want to do that because he is worried they will use August as his starting date. I told him that he will indicate October as his starting date on the application, and that is when his benefits will start. But he wrote back to say he was just so concerned about getting benefits on the wrong date, so he was going to wait until October to apply.
I then sent him a return email with my “the sun will come out tomorrow” message. In other words, even in the EXTREMELY unlikely event that his benefit start date ends up being August, the world won’t end, and his benefits aren’t affected all that much. And let me explain that to you.
Let’s say Bob’s October full retirement age benefit rate is $3,200. If through some fluke his benefits started two months earlier in August, he‘d get a slightly reduced benefit. Benefits are reduced about one-half of 1 percent for each month they are started early. That comes out to a 1 percent reduction for Bob. So instead of $3,200 per month, he’d get $32 less per month, or $3,168. That’s the downside. He'd get $32 less each month. But on the upside, he ends up getting two extra Social Security checks at $3,168 each, or $6,336. Bob would have to live 198 months, or more than 16 years, before he comes out on the losing end of the Social Security stick with that slightly earlier starting date.
Bob was a bit relieved by that point I made. But then he told me he had another concern: his wife. She has a lower Social Security benefit on her own record, and assuming Bob dies first, she will get widow’s benefits on his record. And he said he wants her to get the most money he can on his record. So if Bob ends up with $32 less per month in retirement benefits, then his wife’s widow’s benefit would be $32 less per month, too.
I then told Bob that if making sure his wife gets the highest widow’s benefit possible was his primary concern, he should consider waiting until 70 to file for Social Security. He would get four years’ worth of “delayed retirement credits” added to his benefit rate, and his wife would also get that extra money in the form of widow’s benefits. Bob told me he considered that, but he and his wife decided he should not give up all the benefits he'd get between now and age 70.
So now, back to Bob’s worries that if he files now (in August), there is a chance that he will end up with August as his starting month. What can he do? I once again reiterated to Bob that as long as he indicates October as his starting month, that just wasn’t going to happen. But absolute worst-case scenario, let’s say it did. If he didn’t want those two extra checks with a $32 monthly reduction, his only recourse would be to call the Social Security Administration at 800-772-1213 and withdraw that claim with the August starting month and file a new claim with an October start date.
