Many seniors rush to claim Social Security as early as possible, which means filing at age 62. Doing so makes sense for some people, but it also means settling for a reduced benefit for life.
On the other hand, it’s possible to delay your filing past full retirement age (FRA), which is when you’re entitled to your full monthly benefit based on your wage history. FRA kicks in at 66, 67, or somewhere in between. But for each year you delay your filing beyond that point, up until 70, your Social Security benefit gets an 8% boost. That means that if you hold off until age 70, you could grow your benefits by 24% to 32% on a permanent basis.
Now let’s get one thing out of the way: Most seniors do not wait until 70 to sign up for Social Security. But here are a few reasons you might consider delaying your filing as long as possible.
1. You want to make up for a smaller nest egg
Maybe you had lofty goals to amass $1 million or more in savings in time for retirement. But if life and its many expenses got in your way, you might be worried about covering your living costs now that you’re nearing retirement and your nest egg isn’t as robust as you would’ve liked.
If that’s the case, delaying Social Security as long as possible could help you avoid the income shortfall you might otherwise face. It could also buy you more freedom during retirement to spend money on leisure without worry or guilt.
2. You want to leave your spouse with a more generous survivors benefit
If you pass away first, your spouse will be entitled to survivors benefits equal to 100% of the benefit you collected. And so the higher that benefit is, the more generous an income stream your spouse will be in line to collect.
If you have a much younger spouse who was also a much lower earner, then delaying your filing as long as possible could help your mate avoid a world of financial unrest in your absence. And that’s a really nice gift to leave behind.
3. You want motivation to keep working longer
Some people don’t do well with having a lot of downtime. If that describes you, then working longer is something worth considering. And if you commit to delaying your Social Security filing, it might give you the push you need to avoid retiring in your late 60s and plug away until age 70 instead.
Several studies have found that retirement increases depression rates because seniors who are used to a structured schedule often struggle in its absence. Extending your time in the workforce could help you avoid a hit to your mental health. And while you could always claim Social Security at FRA and continue working beyond that point, you might be more apt to stay at your job longer if you set your mind on filing at 70.
Putting off Social Security until 70 isn’t something everyone can do. But if the option exists in your world, it pays to jump on it. You could end up benefiting in more ways than one.
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