When deciding when to claim Social Security benefits, you might feel tempted to take them as early as age 62. However, if you’re considering waiting until 70, I can assure you it’s a decision that could significantly enhance your financial well-being. The most compelling reason to wait for me, is the increase in your monthly benefits. You will get about $1,900 more each month compared to claiming your benefits when you are at 62. Here’s why delaying can pay off for you.
Why should I retire at 70:. A Significant monthly boost
There is a good reason why you should wait until the age of 70. For one thing, it can significantly increase your monthly payment. For instance, if you decide to delay payments, you might be able to receive an extra $1,900 compared to someone who started receiving their payments at age 62. This money will accumulate over the duration of a typical retirement. If you reach the age of 90 years or more, it could add an extra half a million dollars to your total benefits. That will leave you free to enjoy your retirement without having to worry about any expenses you need to make.
Avoiding the earnings test
The earnings test is one fundamental aspect that could have an impact on you if you claim benefits early. In case you are eligible for benefit payments and apply for them before attaining the full retirement age, then expect all of your monthly payments to be reduced based on the extra money that you earn. You can earn in different ways while waiting to reach your full retirement age without being afraid of losing any amount from Social Security.
Maximizing your portfolio growth
Waiting until 70 allows you to leave your retirement accounts untouched for several extra years, giving your investments time to grow. This delay can lead to significant compounding interest, enhancing the value of your portfolio. When you finally begin to withdraw, you will not only enjoy larger Social Security checks but you will also have a healthier overall financial situation, making your retirement more enjoyable.
Higher survivor benefits
If you are the higher earner in your household, delaying benefits can also maximize the survivor benefit for your spouse. By waiting until 70, you ensure that if something happens to you, your spouse will receive a higher monthly income. This extra money offers financial security that can provide both you and your spouse with peace of mind as you navigate retirement.
Tax flexibility
When you delay your Social Security benefits in your early retirement years, you will get greater control over your tax situation. Additionally, you can withdraw from tax-advantaged accounts without the added burden of Social Security income affecting your tax bracket. This strategic approach can help you manage your tax liability more effectively, leaving you with more disposable income.
Considering longevity
Finally, reflect on your family’s history when deciding whether it’s wise for you to file for retirement benefits at 70. If you decide to wait till 70, this could be of great help to you. This option places you in line for bigger checks over a longer retirement period and there may be considerable economic advantage when you do so.
