There are so many benefits of the Social Security and one of them is aging. In case you are trending towards the retirement then you might be well aware of admonishment in order to wait until the age 70 for receiving the greatest monthly benefits.
However, is this always right decision to claim the Social Security benefits at the age of 70? What to know about delaying social security? As, in general, for each year you do wait in order to claim the benefits that you will get an 8 percent benefit raise.
While at present, sixty-six is the complete retirement age or FRA for the Social Security. But, in case you do wait in order to claim the monthly check then the payment will go up every year until the age 70.
An Example
Just as the example, Carol O’Malley born in the year 1953. Then, when he will be at the age of 66 then he would be eligible for receiving the full retirement benefits of almost 2,000 dollars.
In case Carol selects to claim the Social Security at the age of 62 that is the earliest possible time. So, her benefit would be decreased up to 1,500 dollars or 25 percent less than her full-retirement amount. So, the low payment amount would continue until she dies.
In case Carol is waiting until the age of 70 in order to claim a benefit then her payment would be more generous that is 2,640 dollars every month. Hence, by waiting in order to claim from the age sixty-two to age seventy, the monthly annuity payment will grow from 1,500 dollars to 2,640 dollars or 76 percent. In case you could afford to wait a bit more then this looks like the best thing to claim the Social Security at the age of 70. But, might not be.
When Not to Claim at age 70
In case you are in the poor health then it might not be good to wait in order to claim your Social Security income. In case Carol wants to wait to claim her Social Security until the age of 70 then it would take her even more than ten years in order to break even. For instance, in case she does claim her 1,500 dollars Social Security benefit at the age of 62, by the age of 70 she will have collected 144,000 dollars plus the cost of her living adjustments (12 months x 8 years x 1,500 dollars).
There is a difference between the benefit of 2,640 dollars at the age of 70 and 1,500 dollars received at the age of 62, are 1,140 dollars. So, by dividing 144,000 dollars by 1,140 dollars you can learn that this would take over almost 126 months in order to break even.
Hence, in case she thinks that she would die before the age of 80 or 81 then she must collect the benefit early.
In case she thinks that she will live well that is into her 80s she is surely better off to wait to claim the Social Security benefits, in case it is financially possible.
Also, you are acting with some incomplete information as no one knows the death date.
In case you are considering waiting until the age of 70 in order to claim then do not forget about the retirement funds.
When you’ve some additional retirement savings which are in the Roth IRA, IRA, 401(k), or 403(b) then you might also consider about drawing on the resources even before the tapping Social Security.
The goal is to increase lifetime income hence you need to spend time in order to look at the alternatives.
The Bottom Line
The Social Security planning is very complex. Also, there are not any absolutes as well as no one got perfect information.
Then the good Social Security planning will rely on some incomplete data. As no one actually knows how long they would live.
It is also useful to consult with your accountant or tax preparer to map out about when to claim the Social Security benefit.
In case you are expecting to live up to 80s then it is a good plan for a single partner in the marriage.
