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3 Great Reasons to Delay Social Security as Long as You Can

By Maurie Backman - Mar 17, 2021 at 6:48AM

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Here's why it pays to be patient when signing up for benefits.

When it comes to claiming Social Security, you have a range of ages to choose from. You could sign up for benefits at the earliest possible age of 62, but if you go that route, you'll shrink your benefits on a permanent basis. You can also file at your precise full retirement age (FRA), which is the age at which you're entitled to your full monthly Social Security benefit based on your personal wage history. Or, you can hold off on filing even longer -- up until age 70, in fact -- and boost your benefits along the way.

The downside of filing at 70 is clear -- it means waiting longer to get your hands on your benefits. But in spite of that, here are three good reasons to consider waiting as long as possible to sign up.

Social Security card in person's hand

Image source: Getty Images.

1. You'll grow your benefits for life

Once you lock in your monthly Social Security benefit, it'll remain in effect on a permanent basis. Of course, that's not including the modest cost-of-living adjustments you may be entitled to through the years, but still, if you delay your benefits until age 70, you'll score the maximum payout you can get. That's because each year you delay your filing past FRA boosts your benefits by 8%. And Social Security will continue to pay you that sum for as long as you live.

2. You can compensate for absent savings

Ideally, you should be entering retirement with a healthy chunk of money socked away in a 401(k) or IRA. But what if you're short on savings? Maybe you got a late start on building a nest egg, or you faced a series of hiccups that left you struggling to contribute to your retirement plan. If you file for Social Security at age 70, you'll boost your benefits, which can help make up for a lack of savings -- even a glaring one.

3. You'll be motivated to work longer

Working longer is a good thing for many reasons. First of all, there are studies that link working longer to living a longer life. Secondly, working longer allows you to continue padding your savings, all the while leaving your existing savings untouched a few more years. If you make the decision to delay Social Security as long as possible, you may have to stay at your job to make up for not having access to that money -- but again, that can be a very good thing.

Hold off until 70 -- but not longer

At this point, you may be eager to delay your benefits as long as you can -- great. But one mistake you shouldn't make is postponing your filing beyond age 70, because doing so won't benefit you financially. Though waiting to file past FRA will let you grow your benefits by 8% a year, that incentive goes away once you turn 70, so there's no sense in delaying any longer. Keep that in mind so you don't wind up losing out on money you otherwise could've pocketed.

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