Five Steps to Collecting Social Security Benefits

Guess what? Social Security payments aren't automatic. If you're nearing retirement age, you probably have not thought about signing up for Social Security, but you should know the process isn't automatic. The Social Security Administration won't start paying out your benefits until you file an application.

Here are some tips on what to do when you apply for Social Security.

1) Decide When You Want to Receive Benefits

This may seem straightforward. You want your money as soon as possible, right?

Wrong.

You may actually be best off delaying getting your money until the last possible minute. That's because each year you delay cashing in on Social Security, within a range of seven years or so, means more money in each check you receive.

So if you need money as soon as possible, go ahead and get benefits as soon as you can. But if you can wait, it's probably best to do so. A recent T. Rowe Price(TROW Quote - Cramer on TROW - Stock Picks) study found that, if you delayed your Social Security cash-in until age 70, you'd enjoy 41% higher annual income than you would if you started getting the checks at age 62.

Your life expectancy may also play a role. If, say, both your parents lived into their 90s, you may want to wait and get the higher amounts later. If you're in your early 60s and are in poor health, you may want to get the money as soon as you can.

2) Call the SSA Early

You'll have a much smoother signup experience if you reserve an appointment in advance, rather than just showing up and navigating the long lines in the office.

Call the SSA at 800-772-1213 about three months in advance of the month in which you want to file for retirement benefits to schedule an appointment, which will get you quickly to a representative when you show up.

Another option is to file for benefits online, which can make the process even quicker and easier.

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