Baby Boomers are getting older, with the youngest members of this immense generation turning 62 this year. As currently constituted, our Social Security System specifies age 62 as the initial opportunity for claiming monthly retirement benefits. Eligible Americans can make their benefits claiming date decision during the period in which they are anywhere from 62 (Early Filing Date) to 70 (Late Filing Date). Full Retirement Age falls in between, and varies according to date of birth. Participants only get one claiming date.

Unfortunately, a large swath of Boomers fail to plan for their payment starting date. In our Financial Planning firm, we repeatedly hear stories of “sixty-somethings” relying on little more than misconceptions and poor information to choose their start dates. Too often, this results in unnecessary loss of a portion of lifetime benefits. It doesn’t have to be that way.

“I want to get paid before Social Security goes bankrupt” is probably the most common misconception people use to file at their first moment of eligibility (attainment of age 62). The truth regarding Social Security’s financial future is much less frightening. The funding shortfall, estimated to occur in 2032, would decrease monthly benefits for current and future participants. There is no scenario that would result in termination or loss of payments while living.

Early Filing often proves to be a costly error. Delaying the start of monthly payments past the 62^nd birthday adds a monthly increase to the monthly payments, up to age 70. There is no loss of Cost of Living (COLA) adjustments after age 62, which is commonly misunderstood.

Another common early filing mistake is believing that when filing at age 62, monthly increases will apply the same as if filing were delayed. While the recipient will receive all Cost-of-Living (COLA) increases, no delayed filing increases will be credited to monthly benefit amounts.

Senior Citizens are among the most reliable voting blocs in the country. I speak for many or most when I say that “I don’t want a cut in benefits, and I’ll vote against any elected official who fails to fight against reductions.” Given the mindset of elected politicians, this is often sufficient motivation for changing the system before funding problems arise. They will make needed changes if their re-election bids are threatened.

In the reverse, a common erroneous assumption keeps some people from filing early, as they believe that benefits decreased due to working while collecting benefits will be lost. This is untrue, as all monthly reductions will be “pushed forward” and credited once the recipient attains Full Filing Age.

Avoid serious filing mistakes. Ask questions. We can help.