How many correct answers can you answer?
If you’re nearing retirement or already thinking about it, there’s a good chance you have some awareness of claiming Social Security benefits. You’ve contributed throughout your career, and ideally, when you reach a certain age, those contributions become regular checks for you. Sounds straightforward, right?
Yet, details surrounding the program can often be murky. A recent AARP survey has revealed that many individuals lack the necessary information to make informed decisions regarding when or even whether to apply for benefits. Addressing these misconceptions is crucial if you want to maximize your Social Security experience. Below are five important points to consider.
1. What is the earliest age to claim benefits?
Surprisingly, only 40% of survey participants realized the earliest age to claim Social Security is 62. To qualify, you need to be 62 for the entire month, and it gets a bit tricky: if your birthday falls on the first or second day of the month, you’re eligible. If not, you’ll have to wait until the month after your birthday.
It’s essential to recognize that claiming at 62 is considered early and comes with a potential reduction in benefits—up to 30% less compared to claiming at your full retirement age (FRA). However, in cases where financial needs are pressing or if life expectancy is a concern, this may still be the best choice.
2. When can you maximize your monthly benefit?
Even fewer individuals knew they need to wait until age 70 to maximize their monthly benefits, with just a quarter of respondents identifying it correctly. Many guessed younger ages, which can lead to premature claiming and less income.
It’s crucial to recognize that if you claim before 70, your benefits will cease to grow. This means you really should consider delaying your application until then. Otherwise, you might find yourself missing out on significant funds.
3. What is your full retirement age (FRA)?
Your FRA refers to the age when you qualify for full Social Security benefits based on your work history. If you claim at your FRA, you won’t incur penalties for claiming early, and you won’t miss out on late retirement credits that can increase your benefits.
A surprising one-third of people thought the FRA was age 65, with many uncertain. This age comes from earlier regulations, but adjustments were made in the 1980s to ensure the program’s sustainability by raising the FRA for newer generations.
For those born after 1960, the FRA is 67 years. Some who are older may have a slightly lower FRA.
4. Can you claim benefits from a former partner’s record?
Half of the respondents seemed unsure if divorced individuals could claim Social Security benefits based on an ex-spouse’s work record after a 10-year marriage. The answer is yes, but that decade of marriage is essential.
If you ended the marriage before hitting 10 years, you can’t claim those benefits. Remarrying also affects your eligibility; however, you can claim based on your new spouse’s work record. If your ex has remarried but you haven’t, that won’t impact your rights.
5. Will you recover money lost during the Social Security Earnings Test?
The Social Security Earnings Test applies to those claiming benefits before reaching FRA while still employed. If you’re under the FRA in 2025, you’ll lose $1 in benefits for every $2 earned above $23,400. If you reach FRA in that year, you’ll lose $1 for every $3 earned over $62,160.
Many aren’t aware that this reduction, while problematic initially, isn’t permanent. Once you reach your FRA, any benefits withheld will be added back into your future payments. It’s worth keeping this in mind.
If any of these points caught you off guard, it might be time to rethink your Social Security strategy. You could find that adjusting your claims approach will provide you with more financial security. Should you have any uncertainties or specific scenarios, reaching out to the Social Security Administration for clarification could be a good option.
