Amid drastic changes underway in the U.S. government, Social Security, one of the most popular federal programs, is on the minds of many Americans close to retirement as well as those who have already retired.
The fresh angst is not a new feeling by any means. We’ve known for years now that Social Security, at its present rate, is projected to run out in the years ahead. However, money expert Clark Howard says much of the concern is rooted in fear rather than facts, which is why he still wants you to wait until age 70 to apply for Social Security (more on this later). Here’s what he wants you to know today:
“Social Security will not cease to exist. We will still receive a Social Security check. No question about that,” says Clark.
Still, there are some major changes to Social Security that may cause some shock to the bureaucratic system, which Clark acknowledges. As a result, if you’re a new claimant, he wants you to follow a four-month rule regarding applying for Social Security.
Follow Clark’s 4-Month Rule Before Applying for Social Security
Why four months? Because recent changes are likely to delay Social Security’s processing time for new claimants. To name a few, some recent changes affecting Social Security are:
- Plans to cut 12% of its workforce — about 7,000 of its 57,000 employees.
- Overpayment recovery rates have resumed 100%.
- The requirement of in-person visits to field offices for new claims.
“Right now, with Social Security offices being closed and the number of employees being reduced, it’s going to take longer to do your initial application for Social Security,” Clark says.
“So you want to make sure that four months before you want that first check to come, that’s when you apply, not a few weeks, a month out, two months out, you want to use the full four-month cycle, that is the earliest point you’re supposed to apply,” Clark says.
When To Claim Your Social Security Benefits
The uncertainty of change may cause people to question how they approach their financial future, especially when it comes to Social Security. Specifically, Clark says, he’s heard of people rushing to claim Social Security the very second they’re eligible.
“I’m seeing more stories from people saying, ‘Yeah, go ahead and claim [Social Security] the second you can, because we don’t know what’s going to happen to it.’” Clark says. “We do know what’s going to happen to it. It’s going to continue.”
Why You Shouldn’t Claim Social Security at the Earliest Age You Can
As of now, the earliest age you can claim Social Security benefits is 62, according to the Social Security Administration. But is it in your best financial interest to do it then?
It may not be, says Clark.
“The longer you can wait, the better it is for you, because, every year as your Social Security check adjusts upward to inflation, you’re doing it at a much higher base,” he says.
An Exception: Why You May Want To Claim Social Security at Age 62
Clark says knowing your and your family’s health history may be a legitimate reason why claiming Social Security earlier rather than later makes financial sense.
“Now we’ve got people who say, ‘I’ve waited all these years, and I die the day after I get Social Security. Isn’t that terrible?’ No, what’s terrible is that you’re dead, not that you’re not getting a Social Security check. You have to play the odds in life and what the actuarial tables say, unless you know in your family that people don’t live long.”
“If people in your family overwhelmingly die in their 60s, then waiting is not a smart choice,” Clark says.
So, here are some reasons why you might take Social Security early:
- You’ve lost a key means of income and are unable to make it financially.
- Your health is bad.
- Your family’s health is bad.
“Rushing to take the money at age 62, which is what people are really into at this second, is a choice that is wise if you’ve got no money to live on. You’ve lost your job or something like that. But otherwise, the longer you wait, the better it is, because the additional increase in Social Security you get from that day and the rest of your life as you wait, you can’t out-earn that benefit on your own.”
Final Thoughts
With so many structural changes happening in the federal government, Clark says there could be a potential delay in Social Security checks for new claims.
“So when you intend to start claiming your Social Security, no matter if it’s at age 62, 67, 70 whatever it is, you want to apply four months out, because it’s going to take a while right now to get those Social Security applications processed,” he says.
Want more info about Social Security? Read our guide on how to open and use your online Social Security account.
The post Follow Clark’s 4-Month Rule Before Applying for Social Security appeared first on Clark Howard.
