To elect or not to elect, that is the entitlement question. Over the next 2 decades 10,000 people a day will be deciding whether to start or defer a lifetime of income from Social Security Old-Age and Survivors Insurance. Based on our previous post Social Security Election: 3 Most Common Mistakes, you should now know that filing for benefits without understanding all the ramifications of spousal benefits, survivor benefits, and the earnings test could cost you and your spouse 10′s of thousands of dollars over a 3 decade retirement. One must also realize that your Social Security benefits are NOT automatic when you reach a certain age. It is not as easy as checking a box and within a month you will receive your 1st benefit check. Filing for social security benefits is a process to say the least, and a process that should not be taken lightly. This blog will list the 5 most important steps to filing for Social Security.

1. Decide when you want to begin receiving benefits.
2. Contact the Social Security Administration (SSA) in advance.
3. Compile necessary documentation.
4. Seek the Advice of a Professional.
5. Don’t Rely on Social Security as your only source of income.

1.       Deciding when you want to begin receiving benefits seems very obvious, but this seemingly simple task is arguably the most difficult. There are multiple strategies and questions one must contemplate before this decision is ever made: Do I take SS early, do I file and suspend, do I claim-now-claim-more-later, or do I take benefits based on my deceased or former spouse’s earnings record now or later? What are the ramifications of filing now versus later? Will I keep working and how will it affect my taxes or the amount on my SS benefits? The questions and strategies are endless. The last thing you want to do is make haste, and decide without factoring in all the different strategies and your personal investments.

2.      Contact the Social Security Administration at least 3 months before you file for your benefits. This gives you enough time to gather your thoughts, and plan the right the decision. You can either call SSA at (800) 772-1213 or file online at http://www.ssa.gov/.

3.      Compile the necessary documentation. If you don’t have everything ready when you go to your appointment, it won’t be pretty. According to the SSA Web site, you’ll need:

• Your Social Security number
• Your birth certificate
• W-2 forms or self-employment tax form from the previous year
• Your most recent annual Social Security statement

Also, if applicable, you should take:

• Your bank name, routing number, and account number for direct deposit
• Your military discharge papers if you had military service prior to 1968
• Your spouse’s birth certificate and Social Security number if he or she is applying for benefits
• Your children’s birth certificates and Social Security numbers, if you’re applying for benefits for them
• Proof of U.S. citizenship or lawful alien status if you (or the spouse or child applying for benefits) were not born in the U.S.

If you’re missing any of these documents, find out how to get copies of them before you need to apply for benefits. This website from the Centers for Disease Control and Prevention can help you figure out where to write to receive copies of vital records, for example.

4.      Seek the advice of a professional cannot be stressed enough. I cannot tell you how many times folks come back to me after electing their benefits without seeking proper council and being given the wrong advice by the employees at the local SSA office. These people are not financial advisors, and nor do they pretend to be. Electing your benefits is not like selecting whether you want vanilla or chocolate ice cream. Taking the necessary steps to electing social security properly is like selecting vanilla or chocolate ice cream with Jimmies on top depending on the last time you ate ice cream and what day of the week it was on and not to mention whether you are going to work out that day or later in the week. This process needs to take in account things like whether you will keep working full or part-time in retirement, how much in savings have you accumulated, and whether you have a pension or not. All these things need to be considered.

5.      Don’t rely on your Social Security Benefits as your only source of income. Hopefully you are not reading this a few months before your retirement date. It is sad, but too many Americans have ended up in this situation. SS was never designed to replace your pre-retirement income, but act as a supplement. Today, too many Americans are retiring with very little in savings and relying on social security benefits to pay for their longest vacation.

Please continue to follow this series of blogs as we discuss in more detail the when, how, and what strategies to use when applying for Social Security Benefits.

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