It’s important for FERS participants to have a strategy for when to file for their Social Security retirement benefit. For some, delaying when they start receiving Social Security may make sense while a different strategy is better for others. It all depends on your personal financial situation.
You can start receiving your Social Security benefits as early as age 62 but your monthly benefit will be reduced because you’ll be receiving payments over a longer time period.
For example, if you were born between 1943 and 1954, your full retirement age is 66. If you file at age 62, your benefit will be approximately 75% of the full retirement benefit you’ve earned. If you wait until age 66, you would receive 100% of your benefit.
When you delay filing for Social Security, you start earning credits for each year after your full retirement age. For those born between 1943 and 1954, waiting until age 67 instead of 66 can increase your benefit to 108% because you delayed getting benefits for 12 months. You will continue to earn credits for each year you delay filing for your Social Security benefit.
By age 70, you’ll receive 132% of your monthly benefit because you delayed getting benefits for 48 months. Keep in mind, after age 70, you no longer earn credits for delaying your Social Security benefits.
Your FERS annuity and Thrift Savings Plan provide two other sources of retirement income in addition to Social Security. Depending on your financial situation, choosing the wrong time to file for Social Security can have income tax consequences.
That’s why it’s a good idea to work with a FRC℠ certified professional who fully understands your federal benefits and can help you choose the best strategy for your retirement.