3 good reasons to delay social security as long as you can
When it is a question of claiming social security, you have the choice between several ages. You can register for benefits from the age of 62, but if you choose this route, you will permanently reduce your benefits. You can also file for your specific Full Retirement Age (FRA), which is the age at which you are entitled to your full monthly Social Security benefit based on your personal salary history. Or, you can delay filing even longer – until you’re 70, in fact – and increase your benefits along the way.
The downside to filing at 70 is clear – it means waiting longer to get your hands on your benefits. But despite that, here are three good reasons to consider waiting as long as possible to register.
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1. You will increase your profits for life
Once you lock in your monthly Social Security benefit, it will remain in effect permanently. Of course, that doesn’t include the modest cost-of-living adjustments you might be entitled to over the years, but still, if you delay your benefits until age 70, you’ll get the maximum payout you can get. . This is because every year you delay your declaration to the FRA increases your benefits by 8%. And Social Security will continue to pay you that amount for as long as you live.
2. You can compensate for the missing savings
Ideally, you should retire with a decent amount of money in a 401 (k) or IRA. But what if you run out of savings? Maybe you started building a nest egg late or faced a series of hiccups that forced you to struggle to contribute to your pension plan. If you apply for Social Security at age 70, you will increase your benefits, which can help offset even a glaring lack of savings.
3. You will be motivated to work longer
Working longer is a good thing for a number of reasons. First of all, there are studies that link working longer to living longer. Second, working longer allows you to keep building your savings, while leaving your existing savings intact for a few more years. If you make the decision to delay Social Security for as long as possible, you may have to stay at your job to make up for not having access to that money – but again, that can be a really good thing.
Wait until 70 – but no longer
At this point, you may want to delay your benefits for as long as you can – fine. But one mistake you shouldn’t make is to defer your deposit beyond 70 years because it won’t benefit you financially. Although waiting to file a declaration with FRA allows you to increase your benefits by 8% per year, this incentive disappears once you are 70, so there is no sense in delaying any longer. Keep this in mind so that you don’t lose money that you might have otherwise pocketed.
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