When is the right time for you to file for Social Security benefits? It’s a question that nearly every retiree faces. According to the Social Security Administration, almost 90 percent of all workers age 65 and over rely on Social Security income.1 That means Social Security is likely to play a role in your income strategy, no matter your retirement plans.
Of course, not all Social Security benefits are equal. Your benefit amount depends on your career earnings and how long you worked. More important, though, it depends largely on when you file for benefits.
You are eligible to file as early as age 62. However, your full retirement age (FRA) likely falls between your 66th and 67th birthdays. If you file before your FRA, you could see your benefits permanently reduced as much as 25 percent.2
Retirement is a major financial challenge even for the most disciplined savers. While you will likely benefit from Social Security payments, you may not have any other form of guaranteed lifetime income. That means you may need to fund much of your retirement expenses with savings.
One of the biggest challenges retirees face is funding a retirement that could potentially span decades. People are living longer than ever. If you retire in your early 60s, it’s possible that your retirement could last 30 years. In fact, you may spend more time in retirement than you did saving for retirement.