Social Security: 3 Things That Affect When You Should Apply
When to apply for Social Security is a tough decision because it has ramifications for the monthly payments you'll receive throughout your retired years. The earlier you file for benefits, the smaller your monthly payments will be. Waiting longer to apply will result in larger monthly payments -- but at the cost of missing out on those early checks. There are many factors to consider in deciding when to apply for Social Security, but the following three are crucial for nearly every retiree looking to take their hard-earned benefits.
Social Security retirement benefits are available as early as age 62, and you don't actually have to be retired in order to start receiving monthly checks. However, the Social Security Administration does have a rule that if you haven't yet reached your full retirement age and are still working, then you can forfeit some of your Social Security benefits if you make more than a certain amount from work. The limit is $16,920 for 2017 if you won't reach full retirement age this year, with the loss of $1 in annual benefits for every $2 you make above the $16,920 threshold. If you will turn 66 in 2017, then a higher limit of $44,880 applies, and you'll lose $1 for every $3 you make above that amount.
The Social Security forfeiture rules give you an incentive to wait until full retirement age to claim benefits if you're still working. In fact, the way that the rules work, if you make enough to forfeit your entire Social Security check for a given year, you'll be treated in the future in the same way as if you had filed for benefits a year later than you actually did. Once you reach full retirement age, you can work as much as you want and still keep all your benefits.
Source: Fool.com
