For many seniors, Social Security serves as an important source of income. And if you expect to depend heavily on your benefits in retirement, then it pays to do what you can to boost them.
In fact, one strategic move on your part could result in a more generous Social Security benefit. But whether that’s the right route to take is a different story.
Are you willing to wait?
When it comes to claiming Social Security, you have a choice of filing age. You can sign up as early as age 62 or delay your filing all the way until the age of 70. (Technically, you can hold off beyond age 70, but there’s no financial benefit to doing so.)
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The highest Social Security benefit you can snag this year is $4,194 a month. But that assumes you’ve delayed your filing until age 70.
If you’re eligible for Social Security’s highest possible monthly payday but claim benefits at the earliest age of 62, you’ll get just $2,364 a month. All told, there’s a difference of $1,830 between the two.
As such, your ticket to a higher monthly Social Security benefit could be none other than a delayed claim. But that doesn’t automatically mean signing up for benefits at age 70 is your most ideal option.
For one thing, you may want to retire at a younger age because you’re at a job that’s not only making you miserable, but also negatively impacting your health. Delaying your Social Security filing could mean sentencing yourself to have to stick out that job — even if it results in unfavorable health consequences.
Speaking of health, if yours is poor, then a delayed Social Security filing might boost your benefits on a monthly basis. But it won’t necessarily boost them on a lifetime basis.
In fact, if you have reason to believe you won’t live such a long life, then the general convention is that it’s best to sign up for benefits on the early side, not the late side. That way, you’re likely to get more money from Social Security in your lifetime.
Should you chase a higher Social Security benefit?
If working until age 70 isn’t bothersome to you and you have reason to believe you’ll live a pretty long life, then holding off on claiming Social Security until age 70 could pay off in a very big way. In fact, it has the potential to make you $1,830 richer on a monthly basis throughout your retirement.
But before you go that route, think about whether a delayed filing makes sense. You may decide that your health isn’t worth the extra money in retirement. Or you may come to the realization that your nest egg is in better shape than you think, so you’d rather claim Social Security sooner so you can wrap up your career and start to pursue all of the hobbies and goals you put off due to your demanding work schedule.
The upside of locking in a higher Social Security benefit is getting that larger payday on a monthly basis for life. But that doesn’t automatically mean there aren’t other filing options that will work out well for you.
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