In January of 2017 the full retirement age (FRA) started increasing to age 67 in two-month increments over the next six years. When I refer to 66 as full retirement age in this article be aware that your FRA will be up to a year later depending on when you turn 62.
OK…, you are either fast approaching 62 or already there and contemplating the best strategy to take to maximize your benefits. Should I take my benefit early at age 62, full retirement age of 66, wait to age 70, or somewhere in between? It’s a big decision for many who are on the fence and not knowing which way to go. Did you know that you don’t have to be retired to collect Social Security? Federal employees can collect Social Security at age 66, their full retirement age, without any reduction in benefits? You can work and collect it as early as age 62, however you will have to pay back a portion of your benefit until you reach full retirement age.
Approximately 45% of all Social Security recipients claim their benefit at age 62, 30% at age 66, and only 3 to 4% wait until age 70 or later. Others file for benefits at ages between these dates.
Most married couples coordinate their Social Security Benefits  to increase their total retirement income, that’s what my wife and I did. It’s common practice for the lower wage earner to take their benefit early, as early as age 62, while the higher earning spouse doesn’t file for Social Security until age 70. There are many factors to consider and it takes time to research all of your options and what is best for you and yours.
According to a January 2018 article in Kiplinger’s Retirement Report, “Benefits at age 70 are 76% higher than at age 62.” Those who delay collecting until age 70 reap the much higher benefit and from the full retirement age of 66 until age 70 benefits increase on average 8% a year! Not bad.
Many act on necessity. If you need the money to make ends meet apply as soon as possible. In my case my wife applied at age 62 and I won’t collect my benefit for another year and a half when I reach 70. I did file and suspend my benefit when I turned 66 so that my wife could collect a higher spousal benefit. This option is no longer available. If I should die first Mary would apply for my death benefit. The Kiplinger article states, “For married couples, at least consider having the higher earner delay as long as possible. That higher earner’s benefit will be the one that lasts the lifetime of the second spouse to die.” The death benefit is the entire amount received by the deceased spouse.
When to apply often depends on the ages of the couple, are you the same age or is one spouse much younger than the other. Other circumstances come into play when making this decision. The rules are a little different depending on your retirement system.
The rules are fairly straight forward for FERS annuitants . Employees pay into the system their entire federal and private sector careers unlike CSRS employees that don’t pay into the Social Security system. You may be eligible for a Social Security Supplement  if you retire before age 62 and your benefit is not impacted by the WEP penalty that CSRS annuitants are subject to.
It is beneficial for FERS workers to buy back their post 1957 military service time . FERS retirees with Post 1/1/57 military service will not get credit or annuity computation for their military service without making a deposit using SF Form 3108 . If a deposit is made, the employee will receive credit towards his/her annuity computation.
CSRS annuitants  are eligible for Social Security only if they worked a minimum of 40 quarters, 10 years of employment, where they paid into the Social Security system. Plus CSRS employees are subject to the Windfall Elimination Provision  (WEP) that reduces any benefit you earn depending on the number of years you paid into the system. The WEP reduction stops if you have 30 years of substantial earnings .
CSRS retirees that are eligible to collect Social Security at age 62 and have active military time will see their CSRS annuity decrease unless they buy back their military time . If you served 4 years military service and didn’t buy back your military time, your federal CSRS annuity will decrease by approximately 8%, 2% for each year of military service. If you buy your military time back your annuity will not decrease and you will also collect a Social Security check.
I wrote an article titled Social Security – When Should I Apply and Replacing a Lost Card  in 2012 when I turned 62 that you may find helpful. Be aware that the income limits in the 2012 article are now higher than they are today and some of the information is dated.
There are many resources available to help you decide on the best path for you. Take your time to determine what is best for you and if you have specific questions call your local Social Security office at 1-800-772-1213, they can help.
- How Work Effects Your Benefits 
- Social Security Website 
- Military Deposit Guidance 
- How Married Couples Can Maximize Their Benefits (CNBC) 
Helpful Retirement Planning Tools / Resources
Distribute these FREE tools to others that are planning their retirement
- TSP Information 
- Retirement Planning Guide 
- Master Retiree Contact List  (Important contact numbers and information)
- 2018 Leave and Schedule Chart  (Excel chart tracks all leave balances. Use this chart to set target retirement dates.)
- Annuity Calculator (FREE Excel chart estimates annuity growth)
Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.
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