Seniors are often warned to be careful when filing for Social Security. That's because your filing age can dictate how much monthly income the program provides you with for the rest of your life.
If you're in your early or mid-60s, you may want to hold off on claiming Social Security to grow your monthly benefit. But in some situations, waiting to file just doesn't pay. And if any of these scenarios apply to you, it pays to claim benefits as soon as possible.
1. You've lost your job and can't pay your bills without racking up debt
Filing for Social Security before full retirement age (FRA) will result in a reduced benefit, and FRA doesn't kick in until 66, 67, or somewhere in between. And so if you've just turned 62, for example, which is the earliest age to claim Social Security, you may want to hold off on filing so as to eke more money out of the program.
But if you land in a situation where you're out of work before reaching FRA and you can't cover your bills on savings alone, then it pays to file for Social Security immediately if doing so spares you from having to rack up credit card debt. Not only can that sort of debt cost you a lot of money in interest, but it could also damage your credit score, making it harder to do everything from get a car loan to secure a rental.
2. You've been diagnosed with a medical issue that could shorten your lifespan considerably
Filing for Social Security early will slash your benefits on a monthly basis — but not necessarily on a lifetime basis. And if you've been diagnosed with a condition that's likely to shorten your lifespan, then it could pay to claim Social Security immediately.
Say you're looking at a $1,600 monthly benefit at an FRA of 67, only you find out at age 62 that you may not live as long as expected. In that case, signing up for Social Security right away will reduce your monthly benefit to $1,120. But if you only end up living until 72, you'll come out over $38,000 ahead by virtue of filing right away.
3. You've already turned 70
Delaying your Social Security filing past FRA will help you boost your benefits — but only to a point. For each year you hold off on claiming benefits, they increase 8% for life.
But once you turn 70, you can't accrue the delayed retirement credits that leave you with higher lifetime benefits. So at that point, it pays to file immediately and start getting the money you're entitled to. In fact, if you wait too long beyond your 70th birthday to claim Social Security, you could end up losing out on money rather than gaining it.
Sometimes it doesn't pay to wait
Holding off on claiming Social Security is a move that often makes sense — but not always. In some cases, it does pay to file immediately, even if your initial plans said otherwise.
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