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How to Apply for Social Security

1. Consider the Timing of Your Application

The timing of your application can impact the amount you will receive in benefits. If you wait until your full retirement age to collect payments, which is an age set by the Social Security Administration based on your date of birth, you’ll receive the full amount of your benefits. Filing for benefits prior to this age could lead to a decrease in the monthly payment amount. For instance, if your full retirement age is 67 and you start retirement benefits when you turn 62, the monthly payment might be reduced by about 30%. If you wait and opt to receive benefits later, the amount will grow each year until age 70. For example, if you have a full retirement age of 66 and you wait until age 70 to start collecting payments, the amount will be 132% of the benefit you were eligible for at age 66.

Keep in mind when you begin the process that Social Security payments will not start immediately. “You should generally file for benefits at least two months before you want to start receiving payments,” says Andy Panko, a certified financial planner and owner of Tenon Financial in Iselin, New Jersey. Benefits are designed to be paid for the previous month. If you apply in January, your benefit might begin in February and would be paid out in March.

Your Social Security payments may be subject to taxes. “Keep in mind that 85% of the Social Security income is taxable if your income is more than $34,000,” says Syed Nishat, partner at Wall Street Alliance Group in New York. “If the income is between $25,000 to $34,000, the tax is on 50% of the benefit.” Talk to an advisor or tax planner before applying for Social Security to see how much you can expect to pay in taxes after benefits begin.

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