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Understanding Social Security
For those born between 1943 and 1954, the full retirement age is 66. For those born in 1955 or later, the full retirement age rises in two-month increments to age 67 for those born in 1960 or later. While you can claim benefits before you reach your full retirement age, you will not receive as much as you could if you wait.
In addition to filing too early, another common mistake people make is not considering how their social security benefits will affect their spouse. In order to get the most out of your benefits, itís a smart idea to coordinate the timing of your claims. If you can live off of one spouseís income, waiting to claim the other's will allow you to receive more when you do.
A mistake some people make is claiming right away to find out they donít need the income just yet. If you claim early, say right when you turn 62, you have 12 months to withdraw your application, payback your benefits and restart once you would like to receive the benefits.
One factor that many people donít know about Social Security is that how much how will receive is based off of 35 years of work. So, if you didnít work for 35 years, the years you didnít earn money will be calculated as zeros. But, those years without work can easily be replaced by another year that you did work, no matter what age. So, if you maintain a part-time job in retirement, those zeros can be replaced, as long as you havenít claimed benefits yet. The 35 years do not have to be consecutive, say if you stayed at home to take of your children for a few years. The years are simply the 35 top earning years in your career.
Social Security is a complicated system, so understanding the basics will help you avoid making a common mistake. There are various resources available to keep you informed on the rules and regulations as well as understand the benefits and when to claim based on your needs.