Unlike Medicare, which only starts offering coverage to seniors at age 65, Social Security gives you an eight-year window to start receiving benefits that begins at 62 and ends at 70. In fact, that window technically doesn't end at 70 -- you can sign up later than that, but there's no financial reason to wait that long.
In the middle of that window is what's known as your full retirement age, and it's when you're entitled to the full monthly Social Security benefit your earnings history entitles you to. Here's what that age looks like:
Year of Birth
Full Retirement Age
66 and 2 months
66 and 4 months
66 and 6 months
66 and 8 months
66 and 10 months
DATA SOURCE: SOCIAL SECURITY ADMINISTRATION.
You'll often hear that it's wise to wait until full retirement age to claim benefits, because if you file sooner, you'll reduce those monthly payments (and in most cases, for life). But here are a few good reasons to hold off on filing for benefits past full retirement age.
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1. You'll get more money each month
The reason to not file for benefits before full retirement age is clear: You don't want to slash them indefinitely. But if you delay benefits past full retirement age, you'll score an 8% increase for each year you hold off, up until age 70. That's why 70 is considered the latest age to file for Social Security -- though you won't be forced to sign up at that point, you'll be giving up money you're entitled to by waiting past 70.
Meanwhile, imagine you're supposed to collect a $1,600 monthly benefit at a full retirement age of 67 based on your earnings record. Filing at 70 instead will increase that number to $1,984 -- for life. And that's not a bad raise to give yourself.
2. You'll increase your lifetime income if you live a long life
Filing for Social Security after full retirement age won't just give you more money on a monthly basis; it could also leave you with more money on a lifetime basis if you expect to live well into your 80s or beyond. Though you'll have to wait longer to first receive income from Social Security, delaying benefits makes sense if your health is in fantastic shape going into retirement, and you have a solid family history of longevity.
Case in point: If you're entitled to a $1,600 monthly benefit at age 67, but you delay Social Security until 70, you'll break even at age 82 1/2 -- meaning, you'll have collected $297,600 in both scenarios. This means that for every year (or even month) you live past 82 1/2, you come out ahead on a lifetime basis by filing at 70.
3. You'll leave behind a higher survivor benefit
If you're single as your senior years approach, you'll only have to consider your own financial needs when deciding when to file for Social Security. But if you have a younger spouse who you expect to outlive you, you'll need to think about his or her needs, too.
One thing you should know is that Social Security pays survivor benefits to people whose spouses are receiving benefits but pass away. Your spouse's survivor benefits will equal 100% of the amount you collect once he or she reaches full retirement age, so the higher your monthly benefits, the more money you'll leave for your spouse to live on in your absence.
Claiming Social Security after full retirement age doesn't always make sense, and there are plenty of good reasons to file at that age or even earlier. But if you like the idea of increasing your monthly income, your lifetime income, and your surviving spouse's income, then it pays to consider delaying benefits past full retirement age.
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