Deciding when to claim Social Security benefits is one of the most important financial decisions you’ll make ahead of retirement. You can claim benefits as early as age 62, but you’re almost always better off waiting until full retirement age or later because you’ll get a bigger monthly check throughout your retirement.
Find Out: 3 Changes That Could Be Coming to Social Security Now That Congress Is Republican
Be Aware: 8 Common Mistakes Retirees Make With Their Social Security Checks
No matter which age you settle on, if you expect to claim Social Security in five years, there are several important steps to take right now.
The first thing you should do is set up a Social Security account. This will be your primary information source in terms of determining your expected benefits based on your work history, earnings record, and when you want to start collecting benefits. Your 35 highest-earning years will determine your monthly payment.
The one thing you don’t want to do is delay things until the last minute. You can do yourself a big favor by starting the process early, according to Steve Chen, founder and CEO of Boldin, a financial planning platform that can help you strategize a retirement plan.
“Those who are five or more years away from retirement have a critical element in their favor: time,” Chen said. “They have enough distance to create a detailed plan and make informed decisions and changes, like saving more or adjusting their spending habits. They also have enough time to contemplate best and worst case scenarios for the future, whether it’s longevity during a strong economy or health challenges amid inflation and low investment returns.”
For You: 3 Things Retirees Should Sell To Build Their Retirement Savings
One of his top recommendations is to calculate your anticipated retirement expenses. This will help you determine the optimum time to file for Social Security and settle into retirement.
“Far too often, near-retirees focus on how much they have saved, rather than taking the time to calculate their anticipated retirement expenses and then plan backward to determine how much income they will need,” Chen said.
You can review your earnings and estimated benefits by visiting your “my Social Security” account on the Social Security Administration (SSA) website. It will provide a complete look at your earnings record on file at the SSA.
The website will also provide your estimated monthly payment based on your earnings so far and the expected claim date. If something looks wrong, contact the SSA. Also, double-check to make sure your expected benefits look accurate based on your earnings.