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There’s an upside to waiting to claim Social Security until age 70, as opposed to an earlier age. You can sign up for benefits as early as age 62. But you’re not entitled to your complete monthly benefit based on your wage history until full retirement age (FRA) kicks in. And FRA won’t arrive until 66, 67, or somewhere in between, depending on your year of birth.
Meanwhile, each year you delay your Social Security filing past FRA, your benefits get an 8% boost. That incentive stays in place all the way to age 70. And while no one will force you to file for benefits at that time, there’s no financial incentive to delay your claim any longer.
Now my goal for my own retirement is to claim Social Security at age 70 and get the highest monthly benefit possible. But while age 70 is my ideal filing age, I also have to come to terms with the fact that I may end up having to file at age 62 instead.
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Why I’m bracing to potentially claim Social Security early
I plan to save aggressively for retirement so I have the freedom to do the things I want to do. I’d also like to keep working in some capacity until a very late age — possibly even indefinitely.
But you know what they say about the best-laid plans — they can get thrown for a loop. And because I know I’m not immune to that sort of upheaval, I have to prepare for the possibility that an early Social Security filing may be in the cards for me.
Right now, I’m gainfully employed. But what if that changes? What if I end up losing my job in my early 60s and struggle to find work to replace it?
Now ideally, even in that scenario, I’d have ample savings to tap, which might make it possible to hold off on claiming Social Security. But what if the market tanks at that very moment and pulling from my nest egg means taking major losses? If that were to happen, I might need to file for Social Security at age 62 to avoid withdrawing from my 401(k) at the worst possible time.
Hope for the best but have a backup plan
Your goal may be to claim Social Security at age 70 to snag the highest monthly benefit you can. But if life throws you a curveball, you may end up needing to pivot by filing for benefits earlier — and reducing them in the process.
Don’t discount that possibility. Instead, plan for it. One backup solution is to do your best to build savings.
In the above scenario, I talked of a triple whammy — losing a job, not being able to find another, and having the market tank all at once. It’s possible for all these things to happen to one person. But maybe that won’t happen to you. Maybe you’ll only lose your job in your early 60s but still have plenty of savings to tap. In that case, you might manage to hold off on claiming Social Security — and avoid a massive hit to that income stream for life.
All told, I really hope my plan to claim Social Security at age 70 comes through. But I’m preparing for the opposite scenario — not to be negative but rather cautious.
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