Claiming Social Security: Social Security enrollment is possible at any age, beginning at 62. Before reaching full retirement age (FRA), however, you do not qualify for the complete monthly benefit that is calculated based on your lifetime earnings. Whether that age is 66, 67, or an intermediate value depends on the year of your birth.
It is a choice that has the potential to enhance your retirement funds in numerous ways.
Regarding Social Security benefits, you are permitted to select a filing age that is convenient for you. Depending on your financial situation, health, employment status, and retirement objectives, you might make that decision.
Social Security enrollment is possible at any age, beginning at 62. Before reaching full retirement age (FRA), however, you do not qualify for the complete monthly benefit that is calculated based on your lifetime earnings. Whether that age is 66, 67, or an intermediate value depends on the year of your birth.
You may also choose to postpone filing your Social Security claim beyond the FRA. Until the age of seventy, your monthly benefit increases by 8% annually, and that increase is permanent.
Applying for Social Security at age 70 could significantly reduce the financial strain of retirement. In the end, receiving additional funds every month affords you greater discretion regarding expenditures on various matters. However, there is an additional, less evident advantage to beginning Social Security at age 70 that you should be aware of.
$440 Monthly Social Security Increase for Social Security Beneficiaries
You may also obtain an increased nest egg.
Delaying the Social Security application process until age 70 may require you to continue working until your benefits begin to appear in your bank account. Additionally, a few additional years of labor could accomplish much for your retirement savings.
To begin with, it is possible that you could continue to contribute to your IRA or 401(k) plan during your later years of employment. Consequently, the additional contributions may significantly augment your current balance. However, neglecting your nest fund for a few additional years may yield a substantial increase in value.
Consider the scenario where your FRA for Social Security is 67 and your savings amount to $500,000. Additionally, consider that you have altered your portfolio’s investments to more conservative ones at that time, resulting in a 6% annual return on your retirement plan. This return is significantly lower than the average return of the stock market.
Should you fail to contribute an additional dollar to your IRA or 401(k) until the age of 70, the initial balance of $500,000 will accrue and increase to more than $595,000. That is an enormous distinction.
Indeed, patience can pay off.
Not every individual is capable of delaying Social Security benefits until age 70. Waiting that long may become impracticable if one is presently unable to maintain employment. Additionally, if one’s health is significantly compromised, it is not advisable to postpone filing until age 70, as doing so could result in a reduced lifetime benefit from Social Security.
Nevertheless, contemplate the benefits of beginning Social Security at age 70. You may not only receive a permanent increase in your monthly benefit, but you may also accumulate an even more substantial pension egg that sustains you throughout your retirement years.
Social Security update: February direct payment worth $943 goes out in 33 days
