Posted on Monday, 20th February 2012 by

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There is much to consider before applying for Social Security. I’ll be 63 in May and my wife turns 62 this year. Do you need your Social Security card to apply? Many misplace their card and it isn’t uncommon to lose a card that you’ve had around the house for 40 years or more. You don’t need your Social Security Card to apply, however the Social Security Administration recommends replacing lost cards because you may need them when you sign up for other programs down the road.

If you misplaced your card complete the SS-5 form. You must send in original documents or copies certified by the issuing agency to prove your identity. They will return your originals if you include a SASE envelope with your application. You can also take the application and documentation to your local Social Security office and they will copy and return them to you during your visit. Many opt to visit their local office to avoid the risk of losing the original documents. You only need one form of documentation for a replacement card except in certain situations. For example, if you take your spouse’s name in marriage you then must also provide an original or certified copy of your marriage certificate.

That was the easy part; now you have to navigate the many options that will impact you and your family for the rest of your life:

  • Do I take my benefit at 62 or wait?
  • Does my spouse’s income impact my benefits?
  • Can I continue to work after I apply and receive my full benefit?
  • If my benefit is considerably lower than my spouses should I wait and take a spousal benefit when he/she applies or take mine now and apply for an increased spousal benefit later?

Each person’s situation is unique and must be evaluated based on their circumstances. The book titled Social Security, Medicare & Government Pensions can help you evaluate your situation. If you have specific questions that need answered call Social Security at 1-800-772-1213 or visit their web site at Social Security representatives are available to help Monday through Friday 7:00 am to 7:00 pm. If you can’t get answers online or through their comprehensive voice prompts system when you call just enter “0” to exit the voice prompts and be routed to an advisor quickly. Waits can be 5 to 30 minutes or longer during peak periods.

OK, you’re 62 this year, what are you going to do?

There are many things to consider. If your full retirement age is older than 65 (that is, you were born after 1937), you still will be able to take your benefit at age 62, but the reduction in your benefit amount will increase compared to those who were born in 1937 or before. My Full Retirement Age (FRA) is 66 and if I elected to take a benefit at age 62 I would receive 25% less than what I would have received if I waited until full retirement age; a significant decrease. Each year, as you approach full retirement age, the reduction decreases. At age 63 my reduction would be 20% and at 65 just 6.66%. The longer you wait to collect the higher your payment will be clear up to age 70. I’m also in the CSRS system and subject to the Windfall Elimination Provision that will reduce my benefit by a predetermined amount.

What I was thinking about more than anything else was what government will do to stabilize Social Security. My article titled Retirees Under Attack,” that I wrote earlier this month, shows you where I’m coming from. Numerous articles and studies including internal government audits confirm that the Social Security fund will be broke by 2036 and sooner if they continue to extend the payroll pay tax cuts that fund Social Security. Nothing is for free and this “Tax Holiday” is really another blow to the Social Security Trust Fund and to seniors collecting benefits. The powers to be will have to work this out and I believe that benefits for annuitants and those close to retirement will not be impacted, otherwise reform will never work and many will suffer. The changes will more than likely impact those younger than 55 and be phased in over time. However, only time will tell.

Another concern for couples that both work is whether the other spouse’s income impacts their ability to collect benefits especially when a couple files a joint return and the joint income exceeds the $14,640 earnings limit. The good news is that each person individually applies for benefits and only that person’s earned income is used to determine eligibility. For example; Joe and Ann are married, Ann is age 62 working part time for a non-profit earning $12,000 a year and Joe is 63 with an annual salary of $82,000 a year. Ann wants to collect benefits now. Joe’s wages exceed the earnings limit so he doesn’t foresee collecting Social Security until age 66, his FRA. At age 66 Joe can start collecting his benefits, if desired, and there are no limits on the amount he can earn. Ann will continue working at the non-profit and because her wages are less than the $14,640 annual earnings limit she can collect her full salary and Social Security benefits now instead of waiting to collect at a later date. If Ann’s earnings were in excess of $14,640 she could continue to work however Uncle Sam would withhold $1 in benefits for every $2 of earnings in excess of the exempt amount.

The earnings limit is only a factor for earned income; income from investments and rental property are not included and will not impact your Social Security payments at any age.

Joe’s Social Security benefits will be much higher than his wife’s. Ann still wants to collect Social Security at age 62 and when Joe starts collecting benefits at age 66 switch to half of Joe’s benefit. Basically, a spouse can collect either half of the spouse’s benefit or theirs, whichever is greatest. The key is that you can only elect half of your spouse’s benefit when they elect to take their benefit and not before.  Since Ann took her benefits early at age 62 the amount she can collect 3 years later at age 65 is 46% of the spouses benefit not the full 50%. If she waits to switch when she is at her FRA, age 66, she would receive 50% of his benefit.

Another consideration is death benefits. What happens if Joe unfortunately dies before reaching his FRA? Ann would receive between 71.5 to 99% of his basic amount under the death benefit rules depending on her age. If she was 65 when Joe died, Ann would receive 97% of his benefit and would give up her lower benefit. If she is 66 or older when Joe passes on she would get 100% of his benefit even though Ann took her benefit early at age 62. She would qualify for his survivor benefit that was not reduced because he didn’t collect until at or after he reached age 66.

Receiving Benefits While You Work – The PLUS Side

When you reach your full retirement age, you can work and earn as much as you want and still receive your full benefits as described above. If you are younger than full retirement age and if your earnings exceed $14,640/yr., some of your benefit payments during the year will be withheld.

This does not mean you must try to limit your earnings. If Social Security withholds some of your benefits because you continue to work, they will pay you a higher monthly benefit amount when you reach your full retirement age.

If you continue to work and earn more than the exempt amount, you should know that it will not, on average, reduce the total value of lifetime benefits you receive from Social Security and may actually increase them.

Here is how it works: after reaching full retirement age, Social Security will recalculate your benefit amount to give you credit for any months in which you did not receive some benefit because of your earnings. In addition, as long as you continue to work, they will check your record every year to see whether the additional earnings will increase your monthly benefit. For more information on this subject download publication # 05-10069 titled “How Work Affects Your Benefits.”

Signing Up For Benefits

Social Security offers an online retirement application that you can complete in as little as 15 minutes. You can apply from the comfort of your home or office 24/7. There’s no need to drive to a local Social Security office or wait for an appointment with a Social Security representative. In most cases, once your application is submitted electronically, you’re done. There are no forms to sign and usually no documentation is required. Social Security will process your application and contact you if any further information is needed.

If you cannot apply online you can call 1-800-772-1213 to make an appointment to avoid any loss of benefits.

Social Security has suspended issuing Social Security Statements due to budget concerns. Use their online Social Security Estimator listed below to determine your benefit. My wife and I used the online calculator to determine our benefits. They use your actual work history file and the reports took less than 5 minutes to generate for each of us. The annual Social Security statements that we all received in the past and the online benefit calculator don’t include the WEP reduction for CSRS employees. To determine the impact WEP will have on your benefit use their online WEP Calculator. The maximum WEP benefit reduction for 2012 is around $370.

Other Helpful Resources

Learn more about your benefitsemployment, and financial planning issues on our site and visit our Blog frequently at to read all forum articles.

Request a Retirement Benefits Summary & Analysis from a local adviser. A sample analysis is available for your review. Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections. This service is not affiliated with

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice. Our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

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