Are You Really Ready to Start Collecting Social Security? 3 Signs it Might Be the Perfect Time.

Taking Social Security benefits is an exciting step in your retirement journey, but you generally only have one attempt to get it right. With few exceptions, once you start claiming, your benefit amount is locked in for life.

This makes it crucial to ensure you're really ready to take benefits before you file. While everyone's situation will be unique, there are a few signs that indicate you're ready to begin claiming Social Security.

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1. You know your expected benefit amount

Knowing what to expect from Social Security is perhaps the most important factor in determining whether you're ready to claim. When you know your estimated benefit, it will be easier to gauge how much of your monthly income will need to come from your personal savings. That, in turn, can help you determine whether you've saved enough to last through retirement.

Your benefit amount is based on several factors, including your earnings history and the length of your career. The simplest way to check your benefit is to review your statements online through your Social Security account, and this is also a great time to double-check that your earnings record is correct. If any of your information is incorrect, it could affect your benefit amount.

2. You know how your claiming age will affect your payments

Your estimated benefit that you'll see on your statements is your primary insurance amount -- or the benefit you'll receive by claiming at your full retirement age (FRA). Your exact FRA will depend on your birth year, but it's age 67 for everyone born in 1960 or later.

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If you file before or after your FRA, it will affect the size of your payments. Claiming as early as possible at age 62 will reduce your checks by up to 30%, while waiting until age 70 will earn you a bonus of between 24% and 32% on top of your primary insurance amount.

The age you file can affect your benefit by hundreds of dollars per month. In fact, the average retiree collects around $807 more per month at age 70 than at age 62, according to December 2024 data from the Social Security Administration.

While there's no wrong age to take benefits, it's important to know how your claiming age will affect your monthly payment to avoid any surprises in retirement.

3. You have a backup plan for the future

Social Security has been on shaky ground for a while now, and although the program isn't going bankrupt, benefit cuts could be looming in the next decade.

The two trust funds are projected to run out by 2034, according to the Social Security Administration's latest estimates. If that happens, the program's income sources are only expected to be enough to cover around 81% of future benefits -- meaning payments could potentially be slashed by close to 20% if lawmakers can't find a solution before 2034.

In addition to potential cuts, benefits have also been quickly losing buying power. Recent cost-of-living adjustments (COLAs) haven't been enough to keep pace with rising inflation, and Social Security lost around 20% of its purchasing power between 2010 and 2024, according to a report from nonpartisan advocacy group The Senior Citizens League.

There's not much you can do about Social Security's financial future, but it is wise to at least keep these factors in mind before you claim. If your benefits are going to be your sole source of income, it could be a good idea to have a backup plan -- whether that's saving more before you retire, finding a source of passive income, or delaying claiming to earn larger monthly payments.

Social Security can go a long way in retirement, which is why it's wise to make the most of it. With the right steps, you can ensure you're as prepared as possible before you file.

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