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What Happens if I File for Social Security After Age 70?

Maurie Backman, The Motley Fool

There's a reason 62 is currently the most popular age to file for Social Security -- it's the earliest age to do so. In fact, most workers who are eligible for benefits would rather get their hands on them sooner rather than later. But then there are those who opt to delay benefits, and for good reason.

Your Social Security benefits are calculated based on how much you earned during your career, but you can't collect those benefits in full until you reach full retirement age. Depending on your year of birth, your full retirement age will be 66, 67, or somewhere in between, but you're actually not required to file for benefits at that point, either. Rather, if you hold off past full retirement age, you'll accrue delayed retirement credits that are worth an 8% boost in benefits for each year you wait.

Closeup of older male

Image source: Getty Images.

But while holding off past full retirement age to take benefits can be a smart idea, waiting past 70 is a major mistake. That's because once you turn 70, those delayed retirement credits stop accumulating, so if you wait too long to file, you could end up losing out on thousands of dollars in retirement income -- money you earned and probably need.

Social Security: You need a filing strategy

There are plenty of good reasons to hold off on filing for Social Security until age 70. For example, if you're low on savings and need the money, waiting past full retirement age will help you snag the highest possible monthly payout. Furthermore, if your health is excellent, waiting until 70 to take benefits could result in a higher lifetime payout. That's because while Social Security is designed to pay you the same total lifetime amount regardless of when you first file, if you end up living well past your life expectancy, you'll come out ahead financially by boosting your individual payments.

That said, once you turn 70, there's absolutely no reason to delay Social Security any further, so if you've already turned 70 and have yet to file, be sure to get on that right now. Social Security will only pay up to six months' worth of retroactive benefits, so if you're a few months late to the game, you can recover by acting quickly. But if you're already, say, 71, and have yet to start getting benefits, it means you've already given up money needlessly, in which case you'll want to file immediately and stop the bleeding.

In fact, if there's a lesson to be learned here, it's that you need to devise a personal strategy for claiming Social Security during the latter part of your working years, as opposed to winging it in retirement. There's no such thing as a single right or wrong age to file for benefits, but where you will go wrong is pulling the trigger -- or waiting too long -- without giving it proper thought.

Specifically, you'll need to review the pros and cons of enrolling for benefits at various ages, and see what sort of financial impact each decision will have. Remember, though your monthly benefits are based on your earnings history, you have the power to reduce or raise those benefits (or keep them at their original level) depending on when you first file. But either way, don't make the mistake of delaying Social Security past age 70, because you'll only end up hurting yourself in the process.

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