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Applying for Social Security

You’ve worked hard for decades and you’ve decided it’s time to retire. Now how do you apply for Social Security benefits? The good news is that applying for Social Security is a fairly straightforward process. The bad news is that maximizing your Social Security benefits is complicated – and requires some delayed gratification on your part. Ready to learn more?

How to Apply for Social Security

If you’re reading this, you probably have the computer skills necessary to apply for your Social Security benefits online. It should take between 15 and 30 minutes to complete the application, but you can always save your application and return to it later if you get stumped (or need a snack).

The Social Security Administration has a handy-dandy checklist of the information you’ll need to provide on your application. If you gather these details before you start, you’ll be done with your online application in no time. Some of the information on the checklist, like your date of birth and your Social Security number, you should know off the top of your head. Other required information, like the routing number for the bank account you’d like the Social Security Administration to use for direct deposit, you’ll probably have to look up before you can complete your application.

Once you e-sign your application and submit it you’ll be able to check the status of your application online. You’ll also get a receipt that you can print and keep for your records. It’s that simple. The Social Security Administration will review your application once you’ve submitted it. They’ll let you know if you’re eligible to receive benefits from someone else’s record (a spouse or ex-spouse, say) or if someone else is eligible to receive benefits on your record.

If you don’t want to apply for Social Security online you can take yourself and your paperwork down to your local Social Security office. You can either make an appointment or walk in. Alternatively, you can call 1-800-772-1213.

When to Apply for Social Security

Here’s where things get tricky. Technically, you can apply for Social Security at age 62, and lots of people do. And hey, we get it. If applying for Social Security at age 62 is all that’s standing between you and living on the streets, of course you should go for it. But if you can afford to wait to apply, waiting is usually the smart financial move. If you wait until your full retirement age (FRA) to apply for benefits, you’ll get 100% of the benefits you’ve earned. FRA is 66 or 67, depending on when you were born. If you apply between age 62 and your FRA, you’ll get less than 100% of the benefits you’re entitled to.

Of course, the real pro move is to wait until age 70 and take advantage of delayed retirement credits that bump up your benefits. But wait, there are other considerations…

File and Suspend

Note: Congress has limited this strategy to those who file on or before April 29, 2016. After that date the file and suspend strategy will no longer be allowed. 

A sneaky move that can boost a couple’s total lifetime benefits is for one member of the couple to file and suspend. Here’s how it works: the higher-earning member of a couple (let’s say it’s the wife) files for Social Security benefits at full retirement age and then suspends those benefits. She doesn’t start getting her benefit checks (yet), but her husband can start claiming spousal benefits equal to half of the wife’s benefits.

Then, when the wife hits age 70 she re-starts her benefits, which have grown thanks to the delayed retirement credits. When the husband reaches age 70 he begins claiming his own benefits, which have also been accruing delayed retirement credits. With this method, the couple’s lifetime benefits are higher. And if the wife pre-deceases the husband, his survivor benefits will be greater, too.

Full disclosure: there has been talk of eliminating the “file and suspend” option. It was designed to give Americans an incentive to work for more years, but its critics say that it allows well-informed, well-to-do couples to “game” the Social Security system.

Bottom Line

Remember that your Social Security benefits are calculated based on your 35 highest-earning years of work. In the Social Security Administration’s calculations, you’ll get a big fat “0” for any years you didn’t work if you don’t have 35 years in the labor force. If staying at your job for another few years will help you get to that 35-year mark, it may be worth it.

Married people would do well to consult (and plot strategy) with their spouses. Would you take a job without consulting your spouse? If not, then you shouldn’t apply for Social Security benefits without consulting your spouse. Even if you have a healthy amount of retirement savings in pensions, 401(k)s or other accounts, Social Security will still be an important asset – and one that will provide a steady paycheck for a lifetime, regardless of how the market performs. You can’t say that about your IRA.

Photo credit: flickr

Amelia Josephson Amelia Josephson is a writer passionate about covering financial literacy topics. Her areas of expertise include retirement and home buying. Amelia's work has appeared across the web, including on AOL, CBS News and The Simple Dollar. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.
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