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What you should know about Social Security benefits

Here are a few tips to guide you in what can be a confusing process.

Tom J. Bechman

March 13, 2023

3 Min Read
Social security card and American money dollar bills close up
QUESTIONS? If you have questions about Social Security and when to take benefits, you’re not alone. Seek advice from an accountant or management consultant.GetUpStudio/Getty Images

Maybe you’ve heard the radio commercial for a financial planner making the claim that “96% of all Americans lose an average of over $110,000 because they file Social Security at the wrong time.” Is that true?

I can’t verify it one way or the other. What I know is that if you or your parents are nearing retirement age, especially as farmers, even knowing how to get straight answers about Social Security can be difficult. Once you get answers, deciding when to pull the trigger and start receiving benefits is a tough decision.

Roger Berry, a vocational-agriculture instructor and farm business management consultant, has helped many people learn about Social Security. Berry, who lives and works in Howard County, Ind., agreed to share some tips. We started with a basic question about when one should take out Social Security. Where indicated, Berry shares information straight from the Social Security website.

What information do you need to decide whether you would be better off taking social security at age 65, 66½ or whenever your full retirement date is, or waiting until age 70? First off, everyone needs to create an account with Social Security to establish access to information that pertains to their individual situation. Even though you may not want to sign up now, it is good to do this as soon as you can. This is recommended for all people at any age. Go to ssa.gov. There are several calculators on the website that allow you to see options for how much you might get in monthly payments.

Picking an age to start drawing Social Security is not an easy one. Everyone’s case is different. There are several computer simulations that can be run to try to suggest the most optimum time. In my experience, many people who use these computer programs are even more confused afterward than before.

What kind of information factors into the decision about when to start drawing Social Security? Many times, you are asked questions such as these: Is your spouse eligible to receive Social Security on their work record, or will they be getting one-half of your monthly benefit? How long will you live? What other income do you anticipate getting after you receive benefits?

From my own personal experience, many people I have dealt with apply either at their full retirement age or later. If you receive benefits earlier than your full retirement age, your monthly benefit is permanently reduced by about 8% per year.

What is meant by “full retirement age”? Here is what the Social Security website says: “Full retirement age, also called ‘normal retirement age,’ was 65 for many years. In 1983, Congress passed a law to gradually raise the age because people are living longer and are generally healthier in older age. The law raised the full retirement age beginning with people born in 1938 or later. The retirement age gradually increases by a few months for every birth year, until it reaches 67 for people born in 1960 and later.”

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Retirement
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