When should I collect Social Security? 3 green lights to look for

When is the right time to claim Social Security? This is a tricky question to answer because the right moment is different for people depending on their own unique situation.

If you're on the fence about whether starting benefits right now makes sense or not, watch for these three green lights that could suggest now is the right time for you to claim. 

1. You have other income sources

One green light that suggests you can claim Social Security is if you have other income to live on besides your benefits. Your Social Security checks are only going to replace about 40% of the income you were earning before retirement. That's not nearly enough to cover all your needs as a senior, especially as healthcare costs often rise as you age. 

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If you have enough income from your 401(k), pension, or other sources to replace an additional 40% of pre-retirement earnings, this suggests you're actually ready to file for your benefits. If you don't have a plan to supplement Social Security, you should reconsider claiming benefits until you do. 

2. You have 35 years of work under your belt 

Your Social Security benefit is based on average wages in your highest-earning 35 years (after adjusting for wage growth). If you haven't worked that long, then your average wages would be reduced by the inclusion of years of $0 wages in the calculation.

You don't want to reduce your benefit by not working for enough years. In fact, you'll ideally want to make sure your average wages are as high as possible. So, if you are earning more than you did in the past and want to work an extra year or two to push some lower-earning years out of your benefits calculation, that could be worth doing.

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If you're satisfied you've got 35 good-earning years under your belt, though, that's a green light that you're ready to claim benefits. 

3. You've coordinated with your spouse

A decision of when to claim Social Security impacts both you and your spouse if you're married.

If you were the higher earner, you may want to wait as long as possible to claim benefits as doing so would allow your spouse more income if you pass away first. That's because Social Security survivor benefits allow your spouse to keep your benefit when you die if it's higher than their own retirement check.  

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If your spouse is waiting on you to claim spousal benefits, though, then an earlier claim might be called for. Spousal benefits can equal up to one-half the higher earner's primary benefit at full retirement age, but they don't become available until the person whose work history they're based on has claimed their own retirement checks first. 

If you and your spouse have worked out a strategy together to maximize your combined lifetime Social Security income and to make sure whoever lives longer is provided for, this is a green light that suggests moving forward makes sense.

Ultimately, you want to be sure you're really ready to file, because it can be hard to undo a benefits claim once you've made it. Watching for these three green lights is a good way to tell if that's the case for you. 

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