When you turn 62, you have the option to start claiming Social Security benefits, but the age at which you file will significantly affect how much you receive each month. While many opt not to wait until 70 to begin claiming benefits, doing so can offer meaningful financial advantages.
1. Larger Monthly Benefits
Once you reach full retirement age, which is 67 for anyone born in 1960 or later, Social Security will pay you your full monthly benefit without any reductions.
However, delaying your claim past this age, up to 70, comes with a generous reward: your monthly benefit increases by 8% each year. This increase is permanent and can make a big difference in your retirement budget.
For example, if your benefit at age 67 is $2,000, waiting until 70 increases that to $2,480 per month. That’s an extra $5,760 annually—enough for vacations, home improvements, or added savings.
2. Larger Survivor Benefits for Your Spouse
If you’re married and the higher earner, waiting until 70 to claim Social Security can also set your spouse up for larger survivor benefits. If your spouse outlives you, they’ll be entitled to survivor benefits equal to 100% of your monthly benefit.
By waiting to claim, you increase your monthly benefit, which in turn boosts the survivor benefit they’ll receive after your passing.
3. More Valuable Cost-of-Living Adjustments (COLAs)
Social Security benefits are adjusted annually for inflation through cost-of-living adjustments (COLA). The higher your monthly benefit, the more valuable these COLAs will be.
For instance, a 2.5% COLA applied to a $2,000 monthly benefit results in a $50 increase, while the same percentage applied to a $2,480 benefit leads to a $62 increase.
Is Waiting Until Age 70 Right for You?
Although waiting until age 70 to claim Social Security may require you to work longer or tap into your savings for a few years, the financial benefits could be significant. If your circumstances allow, it might be worth considering delaying your claim until you reach age 70.
The $23,760 Social Security Bonus Many Retirees Overlook
Many Americans are behind on their retirement savings, but there are lesser-known “Social Security secrets” that could help boost your income. Don’t overlook the opportunities that could help maximize your retirement benefits.
