Social Security is an important source of income for many Americans after they retire. The amount you get each month depends on how much you earned during your working years and when you decide to start taking benefits.
Why Waiting Until Age 70 Can Be a Big Help
You can start getting Social Security as early as age 62, but starting that early means your monthly payments will be permanently lower.
If you start before your full retirement age (which is 67 for people born in 1960 or later), your payments could be cut by up to 30%.
But if you wait until age 70, you get a much better deal. For every year you delay after your full retirement age, your benefits go up by about 8% each year.
For example, if you qualify for $2,000 per month at age 62, waiting until age 70 could give you $3,543 per month. And, with cost-of-living adjustments, you could actually get even more.
According to research, about 90% of people would get the highest total lifetime benefit by waiting until 70. However, only about 10% actually wait that long.
Why Most People Don’t Wait
So why don’t more people delay Social Security and get bigger payments? Many simply can’t afford to wait. They need the money to cover living expenses.
Others worry about their health and want to make sure they get some benefits, even if it means receiving less each month.
Also, claiming early could lower survivor benefits for a spouse, which is something to think about when planning as a family.
What You Can Do
You don’t have to wait all the way until 70 to get a higher payment. Even waiting a year or two past your full retirement age can increase your monthly income. You can help make waiting possible by working longer or saving more in your 60s.
Many retirees don’t realize how much waiting can add to their lifetime income. According to one tip, waiting could mean getting up to $23,760 more each year.
Delaying your Social Security benefits is the simplest way to increase your guaranteed retirement income. It isn’t possible for everyone, but if you can do it, it might help you enjoy more financial security in the years ahead.
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