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The Best Reason to Take Social Security Long Before Age 70

By Maurie Backman – Oct 6, 2021 at 5:04AM

Key Points

  • Delaying Social Security until age 70 will give you a higher monthly benefit for life.
  • For some people, waiting to file makes sense.
  • Here's why you may not want to hold off on filing for that long.

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Though waiting until 70 has its upside, here's why you should claim benefits well before then.

The most popular age to sign up for Social Security is 62, namely because it's the earliest age seniors are allowed to start collecting benefits. Far fewer seniors sign up for benefits at age 70 because many don't want to wait that long, or can't afford to.

There's a definite upside to claiming Social Security at the age of 70. For each year you delay your filing past full retirement age (FRA), your benefit will increase by 8%. If your FRA is 67 and you claim benefits at 70, those monthly payments will get a 24% boost -- for life.

Still, filing for Social Security at 70 isn't right for everyone. And here's one very good reason to claim your benefits sooner.

Two people outdoors reading books in lounge chairs.

Image source: Getty Images.

When you've earned the right to an early retirement

Many people enter retirement with little money socked away in an IRA or 401(k) plan. And it's seniors in this boat who really need to consider delaying their Social Security filings until 70. That way, they can score a higher monthly benefit to compensate for an absence of savings.

But if you're in the opposite boat, and you've done a bang-up job of setting money aside for your senior years, then you deserve to enjoy an early retirement. And claiming Social Security before the age of 70 could be your ticket to achieving that goal.

The danger of not waiting until age 70 to file is giving up on money that will be paid to you every month for the rest of your life. But what if you're sitting on a $3 million nest egg?

Even if you withdraw conservatively from your savings at an annual rate of 3%, that still leaves you with $90,000 a year in income. And if you go with a 4% withdrawal rate, which is what financial experts have long recommended, you'll have $120,000 a year in income.

With that much money coming your way, it may not matter if you don't score the maximum monthly Social Security benefit. Rather, getting some amount of money in benefits could make it more than possible to not only retire on the early side, but also have enough money to pay your living expenses on an ongoing basis.

Live for today

The pandemic has taught many people the importance of living in the moment and not putting off big goals. If your hope is to retire on the early side, and you've worked hard and saved to make that happen, then you shouldn't feel compelled to wait until 70 to file for Social Security.

Now this isn't to say that you have to, or should, sign up for Social Security at 62. Doing so will result in the largest reduction in benefits you can face. But filing for Social Security at 64 or 65 may be a reasonable compromise that allows you to kick off retirement sooner.

Of course, not everyone wants to retire early, and if you enjoy your job and plan to keep working until age 70, you might as well delay your Social Security claim until then if you don't need the money. But otherwise, you may want to consider signing up for benefits before the age of 70 and kick-starting the retirement of your dreams.

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