With the economy being unstable and seniors’ Social Security payments losing value, it’s not looking good for people who are about to retire and will have to deal with the money problems that come with having a fixed income and not much saved. But giving up isn’t the answer. With some smart planning, you can greatly increase your monthly Social Security benefits. This is important because millions of retirees still depend on these benefits for most of their income.
To get the most out of your Social Security benefits, you need to carefully consider when to start claiming them. The choices you make now about how to handle them will directly affect the amount of money you get each month for the rest of your life, so being patient can pay off big time in this case.
It was $1,913.31 a month on average for retired workers’ Social Security payments in 2024. One of the main things that affects this amount is the age at which you start collecting benefits.
If you choose to start getting benefits at age 62, which is the oldest age possible, your monthly payments will be about 30% less than if you wait until your full retirement age (FRA), which is 67 for people born in 1960 or later. This loss of benefits won’t go away, it will last forever. From then on, every raise you get will be 30% less because your “base amount” will be 30% less.
You can also wait to start getting Social Security benefits past your FRA. For every year you wait, up to age 70 (after which your benefits stop going up), your monthly benefits will go up by 8%.
In this case, if your FRA is 67 and your usual benefit is $1,913.31, claiming at age 62 would lower that amount to $1,339.32. If you wait until you are 70 years old, though, your monthly income will go up to $2,372.50. So, waiting to file your claim until you are 70 years old instead of 62 could give you an extra $1,033 every month in retirement.
Should You Wait Until You Turn 70 to File for Social Security?
The numbers may make you think that waiting is always the best option, but the truth is that waiting to start getting Social Security payments until age 70 is not always a good idea. If you have serious health problems and a short life expectancy, starting to get benefits early may be good for your finances.
You could end up with more money over your lifetime and a more comfortable retirement that you can enjoy while your health still lets you.
If getting your Social Security early lets you invest in chances like starting a business, then claiming at age 62 might be a good idea because it would give you a steady income that you can depend on to live. People who have a lot of savings and want to leave a stressful job sooner might also benefit from filing early.
Delaying your Social Security claim, on the other hand, can be very helpful in some situations. If you are getting close to retirement and don’t have much saved, a bigger Social Security benefit can help you out.
For example, if all you can take out of your IRA or 401(k) each month is $400 to $500, getting an extra $1,000 a month from Social Security can help you pay your bills. Also, if you are healthy, waiting to file a claim can lead to a bigger lifetime payout, which lowers the chance that your savings will run out as you get older.
It’s also important to know that waiting to start getting Social Security until you turn 70 won’t automatically add $1,033 to your monthly payments. The exact amount of the raise relies on your past wages and the benefits you are eligible for.
But there are big possible financial benefits to waiting for your claim if you can, especially if you plan to depend on Social Security when you retire.