You'll often hear that it's a good idea to delay your Social Security filing if you can.
The reason? You're entitled to your complete monthly benefit based on your personal earnings history once you reach full retirement age, or FRA. That age is either 66, 67, or somewhere in between, depending on your year of birth. But for each year you hold off on claiming Social Security past FRA, your benefits get an 8% boost. That boost then remains in effect for the rest of your retirement.
Now once you turn 70, you can no longer accrue the credits that result in boosted benefits. This means that if your FRA is 67 but you want the maximum Social Security benefit you can snag, you'll need to sit tight for three years.
That's not necessarily an easy thing to do, though. Many people reach their late 60s and can't fathom the idea of plugging away at a full-time job any longer.
But while the idea of working full-time until age 70 may not sit well with you, it pays to consider a partial retirement that has you working on a part-time basis. Doing so could be your ticket to delaying Social Security -- and snagging a higher monthly benefit that will buy you more financial freedom during your senior years.
The upside of partial retirement
Not every job or career lends well to partial retirement. But many fields do. And if yours falls into that category, it pays to consider shifting from full-time work to part-time work once FRA arrives. Doing so might make it so you're able to delay your Social Security filing while still earning enough money to cover your bills without having to tap your nest egg.
But that's not the only benefit of partial retirement. By phasing into part-time work, you'll get somewhat of a trial run for actual retirement. You'll get to see what it's like to live on less income, and you'll get a sense of how easy it is (or isn't) to fill your days during those times when you aren't working.
Remember, working is a very inexpensive way to occupy your time. The less time you spend working, the more money you might spend on entertainment. That's a wakeup call it may be helpful to get while you still work in some capacity. In fact, a big reason it pays to grow your Social Security benefits is that you'll want to give yourself the option to stay nicely entertained once you're no longer working at all.
The best of both worlds
If you're eager to eke as much money out of Social Security as possible but can't imagine yourself plugging away at a 40-hour-a-week job until age 70, then shifting to partial retirement could be a good solution. And who knows? If that arrangement works out well, you may decide to uphold it even once you've reached age 70 and are receiving benefits from Social Security on a monthly basis.
Many seniors end up finding that part-time work gives them the best of both worlds -- a chance to stay busy and boost their income without overcommitting to a job. And that's an option worth considering for your retirement as well.