Many seniors end up relying heavily on Social Security once their retirement kicks off. And you might become especially dependent on Social Security if you don’t manage to accumulate a lot of savings during your working years.
Unfortunately, the latter situation is one many people land in. Socking money away for retirement can be tricky when life’s expenses get in the way. But if you’re out of time to build savings, your next best bet may be to try to get more money out of Social Security. And delaying your filing might seem like the best solution in that regard.
You’re entitled to your complete Social Security benefit based on your personal earnings history once you reach full retirement age, or FRA. FRA is 67 for anyone born in 1960 or later. But for each month you delay your filing, up until age 70, you have the potential to give your benefits a boost. And that boost will remain in effect for the rest of your life.
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You may be inclined to delay your Social Security filing until your 70th birthday. But you might also end up falling victim to these two mistakes along the way.
1. Forgetting about your health
Delaying your Social Security claim until age 70 might work out for you financially — that is, unless you pass away at a relatively young age. In that case, an earlier filing might make more sense, because even if it means collecting less money on a monthly basis, it might give you more money on a lifetime basis.
That’s why you can’t forget to consider the state of your health when filing for Social Security. If it’s poor, delaying your claim until age 70 is something you may want to reconsider.
2. Delaying a spousal benefit
If you never worked but are married to someone who’s eligible for Social Security, you may be aware that you’re entitled to a spousal benefit based on their earnings record. And that spousal benefit could be worth up to 50% of what your spouse receives from Social Security each month.
But one mistake you don’t want to make is delaying your spousal benefit claim until your 70th birthday. While the option to accrue delayed retirement credits that raise benefits exists for people who are claiming Social Security on their own record, you cannot grow a spousal benefit. It’s just not an option. So once you reach FRA, you might as well sign up to start getting those benefits, provided your spouse has done so, too.
(Your spouse needs to be collecting Social Security for you to get a spousal benefit if you’re married. But if you’re divorced, this isn’t necessarily the case.)
Don’t make a mistake you’ll regret
It’s easy to see why you may be motivated to try to get more money out of Social Security. But don’t fall victim to these blunders. Instead, read up on the rules so you wind up claiming Social Security strategically — and improving your financial picture as a retiree.
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