Planning to Apply for Social Security in 2025? Don’t Miss These 3 Steps!

So, you’ve made the bold decision that 2025 is your year to seize Social Security benefits! Perhaps it’s also the time when you’re stepping into the exciting world of retirement. What a thrilling transition! Those monthly benefits can significantly ease the strain of bills and everyday expenses. However, before you dive into the application process, let’s ensure you’re fully equipped for success.

To avoid leaving money on the table, consider these three crucial steps. As we wrap up 2024, it’s the perfect moment to reflect on these important aspects.

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1. Grasp How Your Claiming Age Influences Your Benefits

The Social Security Administration calculates your benefits based on your earnings during your working years and the age at which you choose to claim them. You can snag your full benefit—known as your primary insurance amount (PIA)—when you reach your full retirement age (FRA). This age varies depending on your birth year, as detailed in the chart below:

Source: Social Security Administration.

Feel free to claim as early as age 62, regardless of your FRA. But be warned: doing so will shrink your monthly benefits. Specifically, you’ll lose about 5/9 of 1% for each month you claim early, which adds up to 6.67% per year for the first 36 months. If you claim even earlier, you’ll lose an additional 5/12 of 1% for each month beyond that.

On the flip side, delaying your claim boosts your monthly checks. Your benefits will increase by 2/3 of 1% per month (or 8% per year) after your FRA until you hit the maximum benefit age of 70.

However, delaying isn’t always the best option. If you have a shorter life expectancy or can’t make ends meet without those benefits, it’s usually better to claim early. If neither situation applies to you, delaying could substantially enhance your lifetime benefits.

Unsure about the ideal claiming age? Set up a my Social Security account. Use the calculator there to estimate your benefits at various ages. Multiply your estimated monthly benefit by the number of months you anticipate claiming to see the potential lifetime benefits for each age.

2. Verify the Accuracy of Your Earnings Record

The Social Security Administration collects your earnings history from the IRS and stores it in your earnings record, accessible via your my Social Security account. While this data is typically accurate, errors can occur—especially if you’ve changed your name but didn’t inform your employer or if someone transposed your Social Security number on paperwork.

Mistakes could cost you dearly, particularly if you show no income for a year you actually worked. That’s why it’s crucial to review your record and ensure everything aligns with your personal records.

A note for high earners: Your income might be underreported, as Social Security taxes are only applied to income up to a certain limit. In 2024, that limit is $168,600, so any income beyond that won’t be reflected in your reported earnings.

Spot an error? It’s vital to rectify mistakes before applying for Social Security. Complete a Request for Correction of Earnings Record form and submit it to the Social Security Administration, along with any necessary documentation that substantiates your actual income for that year.

3. Understand When You Can Apply for Social Security

You can kick off your application process up to four months before you want to start claiming benefits. It’s smart to sign up early to ensure your checks arrive on time. If any hiccups arise with your documentation, early application gives you time to sort them out.

Planning to claim at 62? Beware that you may not be able to apply in your birth month. A quirky regulation means you can only apply for benefits in the month you turn 62 if you were born on the 1st or 2nd of that month. If you celebrate your birthday later in the month, you’ll have to wait until the following month to claim.

Also, remember that Social Security pays benefits in the month following the month they’re due. So, if you apply in February, your first check won’t arrive until March. Make sure you have a backup plan to cover your expenses until then.

For any specific questions about your situation, it’s best to reach out directly to the Social Security Administration. You can do this via phone, email, or by scheduling an appointment at your local office.

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