(Robin Hartill, CFP®)
You probably know that it pays to wait if you want to score the biggest Social Security check possible. You can get your first check as early as 62, though you won’t be eligible for your full benefit until full retirement age (FRA), which is 67 if you were born in 1960 or later.
But if you can hold off until your FRA, it may be worth it to wait just a bit longer before you start pocketing those Social Security benefits. Here’s what you need to do to squeeze an extra 24% out of Social Security.
How to boost your Social Security by 24%
To maximize your Social Security benefit, you need to earn more money, work at least 35 years, and delay your benefit for as long as possible.
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If you take Social Security at 62, your benefit will be about 30% lower than it would be if you waited until FRA. But you don’t have to start benefits at your FRA.
In fact, holding out beyond FRA can be quite lucrative. You’ll earn an 8% delayed retirement credit for every year you wait past your FRA. Then, your benefits cap out at age 70, at which point there’s no reason to wait any longer. If your FRA is 67, delaying until age 70 would add 24% to your benefit.
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One exception: If you’re taking spousal benefits, you won’t be able to earn delayed retirement credits. You’ll receive your maximum benefit at FRA.
What if I’ve already started Social Security?
Even if you’ve already started Social Security, it’s possible to reverse your decision to earn delayed retirement credits. Once you reach FRA, you can ask Social Security to suspend your benefits. Your benefits would be suspended for the month after you make the request. Social Security will automatically restart your payments at a higher amount to reflect the credits you’ve earned once you turn 70.
Should you really wait until age 70?
Waiting until age 70 ensures you’ll collect the maximum Social Security benefit. But it doesn’t make sense in a lot of situations.
Your health is always a big consideration. If you have serious medical issues or your parents died relatively young, it often makes sense to start benefits sooner. Delaying usually makes sense when you have a long life expectancy.
Many seniors simply can’t wait until 70 to start Social Security benefits. If you’re no longer able to work and withdrawals from your nest egg aren’t enough to cover your basic expenses, delaying as long as possible isn’t an option. On the flip side, if you have substantial savings in your retirement accounts, you may want to start Social Security sooner so you can enjoy your golden years even more.
But if you’re behind on retirement savings and able to work, holding out to collect an extra 24% from Social Security can be a savvy move. The timing of your Social Security is a big decision. Your health, costs of living, basic needs, and desired lifestyle are all factors you should consider.
The $18,984 Social Security bonus most retirees completely overlook
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