You can start receiving Social Security benefits as soon as you turn 62, but the longer you wait, the higher your benefits will be – up to the limit.
Waiting until full retirement, which is 66 or 67 depending on when you were born, allows you to receive your full benefits. Waiting until after that boosts your paychecks even more with delayed retirement credits. However, those credits don’t accumulate forever, and waiting to get Social Security after your 70th birthday means you’re leaving money on the table. Here is a way to get a big profit without losing a few months or years of high tests.
How do deferred retirement credits work?
Delayed retirement credits refer to additional benefits that accrue if you wait until after your full retirement age to claim benefits. Anyone born in 1960 or later reaches the full retirement age of 67. Those born earlier have their retirement age somewhere between 66 and 67, and the exact age depends on their date of birth.
Delayed retirement credits start building up when you turn 66 or 67, and will grow each month until you’re 70, as long as you don’t claim Social Security benefits yet. You get the highest benefit if you wait to claim it until you turn 70. However, there is no incentive to wait past age 70 as your benefits will not accumulate, and you miss out on free checks.
Delaying your access to Social Security is not the only way to improve your benefits. The Social Security Administration (SSA) considers a worker’s earnings history when calculating total benefits. If you work a few more years and earn a higher annual salary, those benefits can replace the lower salary years. Social Security looks at your 35 highest earning years when calculating your benefit, so you can influence your total benefit in other ways than just waiting for your 70th birthday.
The ‘filing at 70’ trap and why filing later can cost you
Although 70 is the magic number when you get the maximum Social Security benefit, that doesn’t mean you have to wait until 70 to apply. It can take up to six weeks after you first apply to receive your benefits, according to the National Council on Aging, and you’ll need to create a Social Security account with the SSA.
But you can plan ahead so you don’t miss any checks. The SSA allows you to set aside your first payment. This feature allows you to apply for Social Security benefits months in advance and specify that you receive your first benefit when you turn 70.
“If you have reached full retirement age, you can choose to start receiving benefits earlier than the month you file,” the SSA said. “However, we cannot pay back benefits for any month before you reach full retirement age or more than six months ago.”
What they should do before and after the age of 70
There is still time to plan between now and age 70. You should set up a Social Security account and see how your benefits will change based on when you start receiving benefits.
Although you get the most benefit if you wait until 70, it may make sense to take it out early due to finances, health, marital status, if you are still working and other factors. The decision to apply is very difficult for married couples. It’s usually best for the higher earner to wait until 70 to increase the survivor benefit, while claiming lower-income spousal benefits early if you need checks to help cover expenses. And don’t forget about Medicare: You can still enroll at age 65 even if you’re delaying your Social Security benefits.
