1. Check if you are eligible to receive Social Security
o You are eligible to receive Social Security after you turn 62 if you had worked a minimum total of ten years, which is forty quarters of credits, four for each year you worked. However, you do not have to have worked consecutive years.
o If you did not have a ten year earning record but your spouse did and you had been married to him for over ten years, you may be eligible to receive spousal benefits after you turn 62. This is true even if you are currently divorced, yet the benefit disappears if you remarry.
2. Consider Putting Off Benefit Receipt for a Number of Years.
o Although a person is eligible to receive benefits at age 62, it may be financially sound to put off receiving benefits until a later time. For every year you defer payments, benefit payments will increase until you reach the age of 70. In fact, outside earnings could reduce your Social Security benefits until you reach full retirement age (FDA).
o Although benefits are determined by your lifetime earnings history, the "break even" age is estimated at approximately 78 years of age. That is, if you defer benefits until you are 65, you would have received the same overall amount by age 78.
o If you have poor health or poor family health history, you may want to start receiving your benefits early. However, if you are still working or have an excellent health record, you may want to defer benefits for a few years.
o In addition, you should consider having one spouse wait and the other receive benefits if you are both eligible on your own rig
3. Anticipate Possible Taxes on Your Social Security Benefits
o Depending on your income level, you may have to anticipate receiving less of your Social Security benefits due to taxes.
o Recipients with a household income of less than $25,000 will not have to pay taxes on benefits.
o Taxes on 50% of benefits are paid by recipients with more household income than $25,000 individual or $32,000 married.
o Recipients pay taxes on 85% of their benefits if they have a higher income than $34,000 individual or $44,000 married.
4. Check to see your annual estimate of Social Security benefits are accurate
Everyone 25 years and older should receive an annual Social Security benefits statement. You should check over this statement to see if there are any errors. To avoid future problems, contact a Social Security office to correct the errors.
5. Consider choosing the direct deposit option for payment
To ensure quick access to your benefits, you may want to consider utilizing the direct deposit option. This will allow you to access your money quicker without having to go through the hassle of cashing a check.