You may be looking at your Social Security benefits estimate and wondering if it’ll be enough to carry you through your entire retirement. If you were born after 1960, you can claim early benefits at age 62 and full benefits at 67. If you delay until 70, however, you could be setting yourself up for a lot more.
When Should You Apply For Benefits
Taking early benefits at the age of 62 and continuing to work could penalize you with higher taxes and reduced benefits depending on how much you earn (hint: the annual income cap is $24,480 before penalization starts!) It also reduces your monthly take-home as much as 30%, which can be a huge difference.
You won’t get hit with those same issues if you wait until full retirement age, but taking an extra 3 years to file for Social Security could actually improve your overall monthly benefits. Americans who claim SS benefits at 70 rather than 62 or 67 have larger checks.
Sign up for Parade’s daily newsletter for more great Social Security tips
How Much Will You Get?
Waiting until age 70 to collect your benefits results in about an 8% increase. For the average monthly payment, it comes to around $1,125. While each situation is unique and this number isn’t hard and fast, it is a good estimation of the additional income available to you.
Related: Social Security Recipients Won’t Be Eligible For Hefty $6k Tax Deduction If They Make This ‘Mistake’
Is This For Everyone?
Now this option isn’t ideal for everyone. It hinges on your ability to continue working past retirement age, your health, any disability, and other factors. If you’re in relatively good health and have relatives living well into their 90s, this may be a perfect fit.
Working later in life isn’t an uncommon practice anymore. Boomers and older Gen Xers remain very active in the workplace, providing valuable insights and decades of experience. Companies still value the experience and education that those workers can provide and need them to help train a younger generation to take the reins in the coming decades. Why not use that to your advantage?
Patience is Key
Waiting to take your Social Security benefits until after the age of 70 gives you a boost in monthly take as well as an inflation-proof income that can last well into your golden years. As they say, 70 is the new 50, and people are living longer around the world. Why not set yourself up for a larger payout over the long run by trading in a few more years while you’re still young?
