Many of us tend to view age 65 as a target retirement age. That’s when you become eligible for Medicare, but it’s early enough that you hopefully still have many healthy years ahead of you. But some of us are ready to retire earlier, while others need or want to continue working a bit longer. Luckily, Social Security allows us to choose from a range of retirement dates. You’re not required to claim your benefits on a strict timeline.
In fact, you have eight years in which to consider the timing of your claim. Starting at age 62, you can claim Social Security benefits early. Or, you can wait until your “full retirement age” (66 or 67, depending upon when you were born). And you can even claim your benefits late, up to age 70.
An early claim means a smaller benefit than originally scheduled (at full retirement age), whereas waiting a bit longer to file your claim means your monthly checks will be higher. So, what happens if you wait until age 70 to claim Social Security benefits?
You get more time to save. Social Security probably won’t be enough to fund your entire retirement, so we always urge our readers to utilize a retirement account to prepare for the future. Toward the end of your career, you might be at your peak earning potential. That means you can max out retirement plan contributions and retire with a larger nest egg.
You will earn a larger Social Security check. Social Security benefit checks grow by 8 percent for each year beyond full retirement age that you wait to claim them. Since checks are computed at the time of your claim and set for life, this is one simple way to ensure a more roomy monthly budget.
Obviously, waiting until age 70 to claim your benefits will not work for everyone. But you deserve to have all the information available to you, so that you can make the best decision for your situation. To discuss Social Security and other retirement planning decisions in further detail, please call our office to schedule an appointment. We’ll be happy to help you identify the options available to you.