The age you claim Social Security benefits can have a significant impact on the amount you receive each month. By claiming earlier, you'll receive smaller checks. If you delay benefits, you'll earn larger monthly payments.
When you choose to file for benefits is a personal decision, but it's important to consider all your options. It may be tempting to claim Social Security as early as possible, but if you're married, there's one compelling reason to consider waiting until age 70.
How your benefits could affect your spouse
The age you begin claiming benefits will permanently affect the size of your monthly checks. If you claim as early as possible at age 62, your checks will be reduced by up to 30% for the rest of your life. If you delay benefits until age 70, you can receive your full benefit amount plus up to 32% extra each month.
Not only can this boost in benefits result in a more financially comfortable retirement, but it may also help you or your spouse pay the bills after one of you passes away.
After a death, widow(er)s may be entitled to survivors benefits. In some cases, the surviving spouse could receive the deceased person's entire benefit amount. That means if you delay benefits until age 70 to collect as much money as possible, your spouse could continue receiving those larger checks even after you pass away (and vice versa).
These larger checks could have a significant impact on the surviving spouse's retirement income, especially if he or she is living primarily off of Social Security benefits. Delaying benefits until age 70 could result in hundreds of dollars more per month than if you'd claimed earlier, which can go a long way in retirement.
Should you delay benefits?
Whether or not you wait to file for Social Security depends on your financial situation, your health, and your benefit amount.
If you and your spouse have a robust nest egg that will likely last through retirement, the extra money you'd receive by delaying benefits may not be worth the wait. In that case, you might be better off claiming earlier and giving yourself a few more years to enjoy retirement. On the other hand, if you don't have much in savings, delaying Social Security can give your retirement income a boost.
Another factor to consider is your health and life expectancy. It may not be the most enjoyable topic to think about, but your estimated lifespan can help you decide when is the best time to claim benefits. If you have reason to believe your spouse will outlive you by many years, delaying benefits could be a smart way to help increase his or her income after you're gone.
Finally, think about how your benefit amount will compare to your spouse's. It only makes sense for the higher earner to delay claiming, because your spouse will only collect survivors benefits if that amount is higher than what they're already receiving.
For example, say your spouse is receiving $1,500 per month in benefits and you're collecting $1,000 per month. If you pass away first, your spouse will only continue receiving his or her $1,500 per month — not the combined amounts. But if your spouse were to pass away first, you could start collecting $1,500 per month in benefits.
Choosing what age to claim benefits is a big decision that shouldn't be taken lightly. But when you understand how your age will affect your and your spouse's monthly payments, it will be easier to make the most of Social Security.
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