Timing Is Everything: What to Know Before You Claim Social Security

It’s hard to overstate the importance of Social Security for retirement. In fact, most retirees rely on it far more than they anticipated.

According to Gallup, 58% of retirees say Social Security is a major source of retirement income. That’s more than pensions (34%) or 401(k)/retirement accounts (29%). Yet only 35% of non-retirees expect it to be a major source.

That gap between expectation and reality makes one thing clear: Social Security is a bigger deal than many think. And while applying is relatively simple, making the right decisions around timing and preparation is not.

Here’s what you should know before filing for benefits.

Key Takeaways:

• Most retirees depend more on Social Security than they expected – timing your claim can significantly impact your benefits.
• Filing before your full retirement age (FRA) results in reduced monthly benefits, up to 30% less.
• Delaying your claim past FRA can increase your benefits by up to 8% per year, up to age 70.
• Create a my Social Security account to track your earnings, estimate benefits and help prevent fraud.
• You’ll need key documents ready before you apply, so preparing ahead of time makes the process smoother.

1. When You File for Social Security Matters – a Lot

You can apply for Social Security benefits as early as age 62, but doing so reduces your monthly benefit. For most people, full retirement age (FRA) is 67. If you claim early, your monthly check could be reduced by as much as 30%.

For example, if you were born in 1960 or later, your FRA is 67. A $1,000 monthly benefit at FRA would drop to $700 if you claim at 62. A spousal benefit of $500 would be reduced to $325.

On the flip side, delaying past FRA increases your benefit thanks to delayed retirement credits. You gain about 8% more per year you wait, up to age 70. So, that same $1,000 could grow to $1,240 if you wait until 70.

At Advance Capital Management, we help clients run the numbers in the context of their broader retirement plan. Sometimes delaying Social Security and using savings to fill the income gap makes sense, if it can result in more secure income for life.

2. Estimate What You’ll Receive

Your benefit is based on your highest 35 years of earnings, indexed for inflation. The Social Security Administration uses a formula to calculate your average indexed monthly earnings and convert it into your Primary Insurance Amount (PIA), the benefit you’d receive at your FRA.

To get a personalized estimate:

• Visit ssa.gov and create a my Social Security account
• Review your earnings history
• Use the built-in benefit estimator to see your monthly amount at different claiming ages

This estimate can help you decide whether to delay benefits or use other assets first. Keep in mind: your first check won’t arrive until the month after your chosen start date, so plan accordingly to avoid a gap in income.

Learn more about creating your retirement income stream here.

3. Be Ready with the Right Info

Applying for Social Security is easiest when you’re organized. Whether online, by phone or in person, you'll need to provide:

• Your Social Security number and birth certificate
• Work history, including employers over the past two years
• Direct deposit information for your bank account
• Military service records (if applicable)
• Details about your spouse or ex-spouse, including their Social Security number and date of birth
• Names of children who may be eligible for benefits based on your record

It’s smart to review Social Security’s application checklist ahead of time. Missing information can delay your claim and your first payment.

4. Watch Out for Birthday Rules

Social Security has some quirky rules around your birth date that can affect your eligibility:

• Born on the 1st of any month? Your benefit is calculated as if you were born the previous month.
• Born on January 1? Social Security treats your birth year as the previous year.
• Born on February 29? Don’t worry, your eligibility and benefit calculations still work as if you were born in February every year.

These rules can affect your FRA and how benefits are calculated, so it’s good to double-check the timing if you fall into one of these categories.

5. Set up a my Social Security Account

Setting up a my Social Security account isn’t just about convenience. It’s a smart way to protect your identity and your benefits.

With an account, you can:

• Monitor your earnings history
• Estimate your future benefits
• Request replacement Social Security cards
• Help prevent fraud and identity theft

Unfortunately, scammers sometimes try to hijack people’s benefits by creating fraudulent accounts. But once you create yours, no one else can open one in your name. It’s a simple step with big payoff in peace of mind.

Make Social Security Part of a Bigger Plan

At Advance Capital Management, Social Security isn’t treated as an afterthought – it’s a central piece of your retirement strategy. We help you determine the right time to file, how it fits with your 401(k), IRA or pension income, and how to ensure your overall plan supports your lifestyle goals.

After all, it’s not just about getting a bigger check, but also building a reliable income stream for decades.

Ready to talk through your Social Security strategy?
Schedule a free consultation to see how timing your benefits could boost your retirement income.