When it comes to signing up for Social Security, you have a lot of options. To begin receiving benefits, you must be at least age 62, and you can begin receiving your full monthly benefit based on your personal earnings history when you reach the age of 66, 67, or somewhere in between (FRA).
Your Social Security claim will be expedited if you wait past FRA. By delaying your application by one month, you’ll see a 0.31% increase in your monthly benefit amount 8% more per year is what this means in terms of a raise.
When you reach the age of 70, you are no longer able to increase your Social Security benefits, making it the ideal time to sign up for the program.
However, if you file at 70 with an FRA of 67, your income will increase by 24%.
Despite this, waiting until the age of 70 to begin receiving Social Security benefits may not always be a good idea.
Furthermore, you may be able to get a financial benefit from filing your taxes sooner rather than later in some cases.
Look at the Big Picture
When it comes to collecting Social Security benefits, you should aim to get the most money possible over the course of your lifetime.
As a result, you may be able to save money by cutting back on your salary.
There is a lower monthly benefit if you apply for Social Security benefits sooner rather than later For those who don’t live long enough, filing sooner rather than later may actually be in their best interests.
And if you’re not sure you’ll be able to live to be 70, you might want to consider signing up for Medicare benefits sooner rather than later.
Assume you’re eligible for a $1,700-a-month benefit at the age of 67, and you’re in line for it. Filing at 62 will reduce your monthly payment to $1,190; if you wait until age 70, you’ll get $2,108 a month instead.
However, all of these numbers pertain to a single month and not a person’s entire life.
To get the most out of your benefits in our example, you should claim them when you’re 62 years old rather than when you’re 75, which isn’t particularly young. For example, at the age of 67, you’ll receive $204,000; at 70 you’ll receive $177072 in lifetime benefits.
You may not want to Gamble
It’s possible that delaying your eligibility for Social Security will save you money in the long run if you live longer than the average retiree does. However, if that doesn’t happen, then filing at the age of 70 may result in a lower lifetime benefit from the program.
In order to avoid taking that risk, make it a point to sign up well in advance of the age of 70.
At 62, you may choose to begin receiving Social Security benefits. Other options include waiting to file until you are 65 or 67 years old.
Given your current state of health, you may even decide to postpone retirement until you’re 70 years old. Prior to making a decision to delay Social Security benefits, it is important to weigh the risks.