Social Security Checklist: 7 Tasks You Must Do Before Claiming

To get the most out of your Social Security retirement benefits, you have to think ahead. Start by taking these steps before applying for benefits.

Social Security Checklist: 7 Tasks You Must Do Before Claiming Photo by wavebreakmedia / Shutterstock.com

It’s never too early to start planning for retirement.

Even if you don’t plan to have a traditional retirement, it’s a good idea to consider how you’ll manage your income as you age.

“I’d like to work until I’m dead because I love what I do,” says Stacy Johnson, the founder of Money Talks News. “But I’ll want to cut back at some point, and my Social Security strategy is a part of that.”

As you put together your own Social Security strategy, here are seven things you should be sure to do before you apply for benefits:

1. Create a mySocialSecurity account

Want to stay on top of your Social Security situation? Your mySocialSecurity account is your starting point.

As long as you’re at least 18 and have a Social Security number, email address and mailing address, you can create an account.

Among other things, you can use your mySocialSecurity account to:

  • Receive personalized estimates of future benefits.
  • View your latest Social Security statement.
  • Review your earnings history as detailed in the next section.

Creating an account can help you thwart fraud, too, as we explain in “3 Free Ways to Protect Your Social Security Number.”

To create a mySocialSecurity account, visit SSA.gov, the official website of the U.S. Social Security Administration (SSA).

2. Verify that your earnings are accurate

Your Social Security statement should have a record of your annual income. Check it for accuracy before claiming benefits, and ideally check it regularly.

The amount of your monthly retirement benefit is based on your top 35 years of earnings. So, if there’s an error in your earnings record, your monthly payment could suffer for it.

For example, say an employer fails to correctly report your earnings for even one year. Your benefit upon retiring could be around $100 less every month, according to the SSA.

If you find an error in your earnings record, follow the SSA’s directions for correcting it.

3. Understand your full retirement age

Your full retirement age (FRA) is the age at which you’re eligible to receive your “full” Social Security retirement benefit amount.

Your FRA is based on the year you were born. You can find out what it is by using the SSA’s Retirement Age Calculator.

While you can generally begin getting Social Security at age 62, you will receive less than your full benefit if you claim before your FRA.

On the flip side, if you wait until after your FRA to receive your benefits, you’ll see a bigger monthly payment.

“I want to make my Social Security payment as big as I can,” says Stacy. “So, I’m waiting until I’m 70. But if you need the money now, you might need to start taking payments at the earliest possible date.”

4. Estimate your retirement income streams

Understanding your FRA and how it relates to your total income in retirement is vital, says Roger Whitney, a financial adviser and the founder of Retirement Answer Man.

“Get a clear idea of whether you’ll have income in retirement — whether it’s from your tax-advantaged retirement account, a part-time job or some other source,” Whitney tells Money Talks News. “Also pay attention to the tax issues and what your required minimum distributions might look like from a 401(k) or IRA once you reach age 70½.”

5. Tally up your probable retirement expenses

Don’t forget to estimate how much you’ll spend in retirement. Consider creating a budget. Break down your needs into monthly costs.

Whitney suggests making sure you consider your lifestyle preferences and potential health care needs.

“Do you think you’ll travel? Do you have a health savings account you can use to cover some of your health costs?” Whitney asks. “How you live your life, whether you downsize or go on long vacations, and your health issues can all impact your costs. Do your best to plan for them.”

Once you know how much your monthly expenses will be in retirement, compare them with your expected retirement income. This will give you a better idea of how much Social Security income you will want each month and thus the age at which you should first claim benefits.

Whitney recommends sitting down with a retirement professional who can help you chart a course that makes financial sense for you.

Johnson says you can get a pretty good idea of how to proceed by ordering a customized analysis of your options from Social Security Choices. To learn more about it — including how to get a discount on your analysis — check out “Maximize Your Social Security.”

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