Did you know that the age at which you start collecting your Social Security benefits affects how much you get? The earliest you can start receiving payments is 62. But when you crunch the numbers, it’s clear that delaying can dramatically increase your overall benefit. In short, playing the long game lets you maximize your social security benefits.
How Long Should I Wait?
Waiting beyond your full retirement age (66 or 67, depending on when you were born) to receive Social Security payments means an increase of up to 8 percent in your amount per year, up to age 70 if you were born after 1943. At age 70, you would receive the maximum amount per month.
Do I Have to Keep Working?
You don’t necessarily have to keep working after retirement. Depending on your situation, you may be able to stop working and use money from other investments as income while you wait to draw your Social Security.
What If I Can’t Wait that Long?
There are a variety of reasons why waiting until age 70 might be too long for you and your spouse. In some cases — whether it’s because of a shorter life expectancy due to illness or a lack of confidence in the system — waiting simply isn’t a viable solution.
However, if it’s financial challenges you’re facing, you may be able to find a way to delay benefits. To do so, you’ll need to begin by asking some questions:
- When do my spouse and I plan to stop working?
- What will our income needs be between ages 62 and 66?
- What will our income needs be between ages 66 and 70?
- What will our income needs be at age 70 and beyond?
- What other sources of income do we already have?
- What is our risk tolerance for investments?