You’re undoubtedly aware that if you want the largest Social Security payment possible, you should wait. Your first check can be received as early as 62. However, your full benefit will only become available if you wait until you reach your FRA, also known as full retirement age, which is 67 if you were born in 1960 or later.
However, if you can wait until your FRA, it may be worth waiting just a little longer before collecting your Social Security payments. Here’s what you need to do for an additional 24% from Social Security.
How to Increase Your Social Security Benefits by 24%
To maximize your Social Security benefit, you must earn more money, work for at least 35 years, and postpone receiving your benefit as long as feasible.
When you claim Social Security at 62, your payout will be around 30% lower than if you waited until FRA. However, you are not required to begin benefits at your FRA.
Holding out beyond FRA may be highly profitable. You will receive an 8% delayed retirement credit each year you delay your FRA. Then, at 70, your benefits will be exhausted, and there will no longer be a reason to wait. If your FRA is 67, deferring until 70 would increase your payout by 24%.
Maximum Social Security Benefit in 2022 at:
Age: 62 $2,364
Age: 67 $3,345
Age: 70 $4,194
There is one exception: If you are receiving spousal benefits, you will not be able to accumulate delayed retirement credits. At FRA, you’ll get the most out of your money.
What if I’ve already begun collecting Social Security?
Even if you’ve already enrolled in Social Security, you can change your mind and earn delayed retirement credits. When you attain FRA, you can request that Social Security stop your benefits, and your benefits will be stopped for the month after your request. When you reach the age of 70, Social Security will automatically begin your benefits at a higher rate to reflect the credits you’ve earned.
Should you wait till you’re 70?
Waiting until you reach the age of 70 assures that you receive the highest Social Security payout. However, it does not make sense in many cases.
Your health is always a top priority. If you have major medical problems or your parents died while you were young, it frequently makes sense to begin receiving benefits sooner. When you have a lengthy life expectancy, delaying typically makes sense.
Many seniors cannot wait until they reach the age of 70 to begin receiving Social Security payments. You can’t delay retirement if you can no longer work and withdrawals from your nest egg are insufficient to cover your basic needs.
Waiting till you reach full retirement age to file for Social Security?
On the other hand, if you have significant assets in your retirement accounts, you may wish to begin Social Security sooner to enjoy your senior years to the fullest.
However, if you’re behind on retirement funds and still able to work, waiting to earn an additional 24% from Social Security might be a wise decision. Choosing the right time to receive your Social Security benefits is crucial, and you should consider your health, living expenses, fundamental demands, and preferred lifestyle.