There are a lot of small rules that can make Social Security a lot more confusing than it should be, and that can lead to some decisions that you may regret down the road.
For the most part, you only have one chance to file for Social Security benefits (more on that in a bit). So taking a little time to educate yourself on some of the more important aspects of the program can give you the confidence that you are making the right call on when to file.
Here are three regrets you’ll want to avoid when it comes time to file for Social Security benefits:
1. Social Security Regret No. 1: Filing Too Early
Claiming Social Security at the right age depends a lot on your own situation, and the amount you’ve saved for retirement shouldn’t be the only consideration.
You can start claiming Social Security as early as 62, but if you do you’ll see you’re benefits trimmed for every year you claim before your full retirement age (between age 66 and 67 depending on when you were born). Take a look at this handy chart for reference to what your checks will look like depending on when you claim:
| START COLLECTING AT: | FULL RETIREMENT AGE OF 66 | FULL RETIREMENT AGE OF 67 |
| 62 | 75% | 70% |
| 63 | 80% | 75% |
| 64 | 86.7% | 80% |
| 65 | 93.3% | 86.7% |
| 66 | 100% | 93.3% |
| 67 | 108% | 100% |
| 68 | 116% | 108% |
| 69 | 124% | 116% |
| 70 | 132% | 124% |
That reduction doesn’t go away, either. The good thing is that you at least have one opportunity to change you filing date.
If you filed too early and want to cancel your Social Security benefits until a later date, you can undo your filing within a year of starting the program. The only catch is that you will have to pay back any benefits you’ve received. If you wait you too long, though, you will be stuck at the lower amount forever.
2. Regret No. 2: Delaying Social Security if You Are in Poor Health
This kind of flies in the face of what we just talked about, but delaying Social Security doesn’t make a ton of sense if you’re health is in decline.
Starting Social Security earlier, even at 62, is probably the smart move if you are in poor health because it will most likely give you more time to enjoy if you aren’t expected to live well into your 80s or 90s, but just know your checks will be a bit smaller than if you had delayed.
Regret No. 3: Filing Early Without Considering Your Spouse
Basically, your spouse is entitled to a survivor benefit equal to the amount you collect every month, so if you file early that means they would get a smaller check. This is something to consider, especially if your spouse is expected to outlive you by many years.
Delaying your benefits by even a year or two would mean a much larger check for your spouse later in life.
We harp on when to file for Social Security quite a bit here on Money and Markets, and its for good reason because it probably is the most important decision when it comes to the benefits program. Taking a little time to educate yourself on some of the ins and outs can mean you avoid regrets like the ones above in retirement.
• You can find all of the latest and most important news about Social Security here on Money and Markets.
For our friends: Anyone who wants to grow and protect their money in retirement needs to hear this. For the first time publicly, Bill O’Reilly comes clean about what happened to his money.