While delaying Social Security offers the allure of increased monthly benefits, the trade-off is sacrificing immediate income for an uncertain future. This poses a critical decision for retirees: when to claim? Certain indicators can suggest expediting your Social Security claim.
First off, if your health is declining, that your first red flag. Delaying claiming your Social Security benefits inherently carries the risk of receiving fewer total benefits. While each postponed month augments your future checks, it also represents a potential missed month of income. Robust health may make waiting advantageous, but a recent decline warrants reevaluation. Even with a seemingly long family history, unforeseen health issues can disrupt financial plans. Initiating your Social Security claim earlier can provide essential financial stability during such unexpected scenarios.
Scenarios Where Claiming Social Security Is Unpostponable
The elderly years might be expensive to live, I’m sorry that I’m that sincere, but it’s true. Retirement expenses have a propensity to rise unexpectedly. Your previously dependable home might develop costly repair needs. Your trusted car, once thought to last forever, may sing the siren song of a trade-in. Additionally, healthcare costs can escalate due to new medications or treatments. If your expenses are trending upwards and your savings are strained, starting Social Security can alleviate the financial pressure.
It’s important to remember that the advantages of delaying Social Security have limitations. This benefit ceases to accrue after you reach age 70. Further delay beyond this point offers no additional financial gain. Therefore, if your 70th birthday is approaching, prepare to file your claim. Any further delay simply denies you access to your entitled income.
What if I Claim Social Security at Age 70?
Claiming Social Security at age 70 has both advantages and disadvantages, depending on your individual circumstances. Advantages include receiving the maximum benefit, as waiting until age 70 allows you to get the highest possible monthly amount based on your work history. Additionally, Social Security provides a steady and reliable source of income throughout your retirement, unaffected by market fluctuations or the longevity of your savings. Moreover, even after starting benefits, you have the flexibility to work and earn income without facing penalties.
On the flip side, there are disadvantages to consider. Delaying claiming means missing out on several years of potential benefits compared to starting earlier. The uncertainty of predicting your lifespan or future health needs is also a factor; claiming earlier ensures you receive some Social Security income even if you don’t live as long as expected. Lastly, depending on your income and filing status, a portion of your Social Security benefits might be subject to taxes.
Of course, it is almost unnecessary to say that the final decision is always yours, or yours and your partner’s, if you live with your spouse. In the end, whatever gives you the most satisfaction, quality of life and overall health is what you should do. Also remember to consult with a retirement and Social Security specialist for professional advice.