Key Points
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Delaying a Social Security claim until age 70 often makes good sense.
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A later claim can help you maximize the monthly income you receive.
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The odds are that a later claim will also lead to larger lifetime benefits.
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You can start Social Security at 62, but for many retirees, waiting until 70 is a better plan.
Of course, delaying your claim for benefits for eight full years after you become eligible means you’re passing up a lot of income you could have collected. And unless you want to actually work until you are 70, you’re going to need money in your retirement plans to support you until you claim your benefits.
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Despite these downsides, though, there are plenty of great reasons to wait to start your benefit checks. Here are three of them.
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1. A delayed claim increases your monthly income
The first benefit of waiting to claim Social Security until 70 is obvious. When you wait to start your checks beyond your full retirement age, you increase your standard benefit by 2/3 of 1% per month. If you’re able to delay until age 70 (the full three years from the FRA for anyone born in 1960 or later), you will increase your benefit by 24%.
This makes a substantial difference in what you collect each month. If your standard benefit was on track to be $2,000, for example, a 24% increase in benefits would mean you bring home an extra $480 per month or $5,760 per year. That’s a lot of extra money that could fund an amazing trip, extra healthcare, or whatever else you need.
2. You can increase survivor benefits
Increasing survivor benefits is another major advantage of claiming at 70 if you are married. Survivor benefits provide your spouse with income after you pass away. Your spouse will be entitled to your standard benefit plus any delayed retirement credits you are eligible for.
If you were the higher earner in your household, your survivor benefits could be worth considerably more than your widow’s own retirement or spousal benefits. Your delayed claim could help set them up for success after you are gone.
3. You maximize your odds of collecting the most lifetime income
Finally, the third major advantage of delaying a benefits claim until 70 is that you can maximize the odds of getting the most lifetime income from Social Security. Studies have repeatedly shown that the majority of retirees end up with more money over time if they put off their Social Security claim.
In fact, the National Bureau of Economic Research reported that more than 90% of workers aged 42 to 65 should delay their claim until 70, while just 10.2% actually do that. The cost of claiming at a suboptimal early age is as high as $182,370 in lost lifetime discretionary spending.
For all these reasons, you should seriously consider claiming your payments at 70 rather than earlier. Maximizing benefits with built-in inflation protection and guaranteed for life just makes sense.
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