Experts often warn that claiming Social Security benefits at age 62 – the youngest age at which someone can do so – is one of the biggest financial mistakes a person can make in life.
However, be aware that there are millions of retirees who are doing very well after filing for benefits at this age, and many had legitimate reasons for making this important decision. There is, however, one clear fact that is hard to ignore: retirees will line up for bigger monthly checks the longer they wait to deposit.
“If you are healthy and have other resources to live on, it is worth the wait,” according to the AARP. âYour monthly payment will be 76% higher if you wait to start benefits at age 70 rather than at age 62, the earliest possible age. ”
“By staying longer in your job or finding a part-time job in retirement, you can earn a paycheck that can help you defer Social Security benefits earlier,” the website says. ‘AARP.
“Starting to receive benefits after the normal retirement age can result in larger benefits,” according to the Social Security Administration website. âWith deferred retirement credits, a person can receive their greatest benefit when they retire at age 70. ”
Every dollar counts
Many people struggle to retire their personal savings and “many ultimately fail to reach their goals,” said Maurie Backman, personal finance writer at The motley fool. âThe good news, however, is that Social Security will reward you financially for refusing to claim benefits. And that’s why enrolling at seventy makes so much sense.
From now on, a person no longer has to register to benefit from full retirement age, Backman wrote.
âYou can claim them as early as age 62, but at a reduced rate,â according to Backman. âOr, you can delay your deposit beyond the FRA, and for every month you make, your benefits will increase by two-thirds of 1%. This means that on an annual basis, you are considering an 8% increase to delay your Social Security declaration. . . . So let’s say you are entitled to a monthly benefit of $ 1,600 at an FRA of sixty-seven. If you delay filing for up to seventy years, this benefit will increase to $ 1,984 permanently. ”
But some retirees just aren’t able to wait, she noted.
âIf you lose your job in your mid-60s, for example, and you can’t be rehired, you may need to register for benefits to meet your cost of living. But if you have the option of delaying your deposit until you’re seventy, it could be very financially beneficial for you to take it, âaccording to Backman.
Ethen Kim Lieser is a Washington state-based science and technology writer who has held positions at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow him or contact him on LinkedIn.