Let us start with some definitions:
Primary Insurance Amount (PIA): This is your base monthly benefit. It is calculated at age 62, based on your highest 35 years of earnings. It is the amount you will receive if you file for Social Security at your full retirement age (FRA).
Full Retirement Age: This is the age at which you may claim full, unreduced Social Security benefits. Claiming Social Security before full retirement age will cause your benefit to be reduced. Your benefit will be less than your PIA. Conversely, claiming Social Security after full retirement age will cause your benefit to be higher than your PIA because you will be getting delayed retirement credits.
The "when to apply" question is very complex and really requires a customized analysis. But here are a few points to remember.
The age you file determines your permanent monthly benefit.
If you apply early, your benefit starts out at some fraction of your PIA and remains at that percentage for the rest of your life. It does not go up to 100% when you reach full retirement age.
When you apply impacts survivor benefits as well. If the higher-earning spouse maximizes his benefit by delaying to age 70, this higher benefit will transfer over to the lower-earning spouse at death.
Other things that you will need to consider are your health status, life expectancy, income needs, and overall retirement plans when deciding when to claim Social Security benefits. This may feel overwhelming and as if there is a lot to keep in mind – because there is. Schedule a Social Security consult with us today and do not leave this big decision to guess work.