For sixty percent of Americans, over half of their retirement income comes from social security. For those from low income households the percentage is higher - closer to eighty percent. While the future stability of the program is constantly debated, right now social security is fully functioning and those who have reached retirement age can collect in full. Of course, if you still haven't retired it's not too late to make some changes to your personal saving habits which can help increase the amount you have on hand for day-to-day expenses or emergencies once you're no longer working.
If you have reached retirement age or are approaching that point in your life, and you want to know how you go about collecting retirement benefits, here is what you need to know.
- The earliest you can begin to receive Social Security benefit payments is age 62. However, for most people, beginning to receive benefit payments at age 62 will mean you will receive less per month than if you began receiving Social Security benefit payments at what the Social Security Administration refers to as full retirement age. That age varies according the year you were born. For those born in 1937 or earlier the age is 65. For those born in 1960 or later the age is 67. For those born between 1938 and 1959, the age for full retirement age can be found on the Social Security Administration's web site.
- By choosing to collect Social Security benefits at age 62 instead of your full retirement age you, it is expected that you will collect benefits for a longer period of time. Therefore, even though you collect less per month, it is assumed that you will break even in the end. The Social Security Administration suggests that you contact them and talk about your options to decide which is the best option for you.
- You can continue to work after you've begun to receive Social Security benefit payments. However, if you choose to receive Social Security before you reach your full retirement age, your benefit payments will be reduced if you earn above an annual limit. In 2006, that limit is $12,480. Once you reach full retirement age, your Social Security benefit payments will not be reduced no matter how much money you earn.
- When it comes time to applying for Social Security benefits, review your Social Security Statement that is sent to you every year three months before your birthday. If have not received this statement or you do not know where it is, you can request the statement from Social Security.
- Once you've reviewed your expected benefit payments, you can apply for your benefits. The earliest you can apply for benefit payments is three months before your 62nd birthday. At whatever age you decide to receive your Social Security benefit payments, you need to apply three months before you want to begin receiving the benefits.
- There are three ways to apply. You can apply for social security online at the Social Security Administration's website. You can call toll-free at 1-800-772-1213 and apply over the phone. You can also apply in person at a local office. To locate your local Social Security information and the closest office, go here.
- You may be asked to provide documentation when applying for benefit payments. Typically the documentation needed is: social security card; birth certificate; proof of U.S. citizenship or lawful alien status; military discharge papers if you were in the military; W-2 from last year or last year's tax return.
These need to be original documents. The Social Security Administration will make copies of them and return them. While it is possible to mail these documents and have them returned to you, most people who need to provide documentation choose not to trust these important documents to the mail. They often choose to apply in person for their benefit payments.
- A final decision you will need to make when applying for Social Security benefit payments is how you want to receive them. You can choose to either receive a check monthly by mail or have the money directly deposited into a bank account. By having the benefit payments directly deposited, the funds are available more quickly and you remove the chance that the check will get lost in the mail or misplaced in your home.