In trying to determine the right age to claim Social Security, there is a good chance that many experts will recommend waiting until 70 to start your benefits. And since most people are a little better off waiting, this advice has value.
However, delaying your request for help for such a long time is not always the right approach. In fact, it could cost you thousands of dollars in missed income. You don’t want to lose, so it’s critical that you understand when a delay will leave you with less and how to make the best claim selection for your situation.
Could delaying your Social Security claim until 70 cost you a fortune?
you can claim Social Security Pension allowance as soon as you turn 62. However, if you want the highest possible monthly payment, wait till 70. Each monthly payment amount increases for each year you qualify for benefits but do not receive them. This increase occurs either because you are not affected by early filing penalties that reduce your standard earnings, or because you have earned delayed retirement credits that increase it.
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However, in order to get this high check, you have to lose some payments completely. If you qualify for benefits at age 62 but don’t get benefits by age 63, you miss out on 12 full checks. And if you wait until you’re 70, you forego any eight years of payments that may have been deposited into your bank account. That’s 96 payments you won’t receive and may have come your way.
Whether the delay will cost you money due to 96 missed payments – or leave you better off due to higher payouts later on – will depend on how long you live. After you finally reach 70, you must live long enough for the extra money you received so that you must make up for all the 96 payments you didn’t receive. If you do this, you’re going head-to-head. And if you live longer and continue to receive benefit checks in the future, you will get more lifetime benefits.
If you die before it breaks, you will miss out on some Social Security income you may have. And the amount you miss can be substantial.
How much would it cost you to claim at 70?
to find out how much money you could potentially lose due to delayed social security claimCalculate how much of the total income you missed by delaying applying for benefits.
Tell me you’re on your way an average of $1,657 benefits per month. This amount is only full retirement age (FRA), ie between 66 and four months and 67. If your FRA is 67 and you received your first payment at 62, the five-year early filing penalties will reduce your monthly income to $1,160 each month.
If you start your payments at 62 despite this benefit deduction, 96 checks between 62 and 70 will total $111,360. Therefore, if you passed away before you received a single Social Security check on your 70th birthday, you could potentially lose that amount.
Your delay until age 70 allows you to avoid early filing penalties. and Get a three-year delayed retirement credit anyway. This will give you a monthly advantage of about $2,055 – about $895 more than the payouts you’ll receive starting at $62. It takes a little over 10 years for that extra $895 per month to make up for the $111,360 you missed. If you passed away before that time, you’d expect it to get worse.
When deciding whether you want to defer a Social Security claim, it’s important to assume that it’s best to just wait until 70, because it’s important to factor in this missed income in case larger checks come in then.
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