Many workers think about filing for Social Security early without paying attention to the pros and cons it may have. Needless to say, it could be great for some, but it may not be so beneficial for others.
The most important thing is to be informed to make the right decisions. Then, you can choose whether to do one thing or another. Bear in mind that Social Security benefits are increased for each month you delay filing beyond normal retirement age (66 years and 8 months in 2024).
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When will Social Security benefits stop increasing?
In fact, the Administration claims that your retirement benefits will stop increasing when you turn 70. Therefore, there is no point in filing later than age 70. So, delaying retirement when you reach Full Retirement Age can pay off.
As a matter of fact, your retirement benefits can increase by 24% if you file at 70. That will be about 8% per year. Thus, even if you just want to continue for one extra year after FRA it will be beneficial.
Do not forget that if you do not file early and continue working, you’d better sign up for just Medicare when you are 65 years old. Not doing so could be costly and its coverage may be delayed.
Social Security warning for filers
If you file for retirement before turning 70, some of your delayed retirement credits will not be applied until the January after you begin collecting Social Security benefits.
Make use of SSA’s Online Calculator to get an estimate of your future payments. Visit https://www.ssa.gov/OACT/quickcalc/early_late.html. If not, simply download a Statement and find out lots of details about retirement benefit amounts, SSDI, or survivor benefits.
When it comes to amounts by age, if you are entitled to $2,119 at 67, you could get $2,634 at 70. There is a difference worth over $500. So, it will depend on your financial situation whether it is worth or not getting delayed retirement credits.