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Claiming Social Security at 70 Could Benefit You -- Except in This 1 Scenario

By Maurie Backman – Jan 13, 2022 at 12:02AM

Key Points

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Waiting as long as possible to sign up for benefits doesn't always make sense.

Many seniors rely on Social Security as an important source of income. And chances are, you'll do the same. That's why you may be motivated to do whatever you can to snag the highest benefit possible.

The monthly benefit you're entitled to in retirement will hinge on your personal earnings history. But the age at which you claim Social Security will also dictate what your monthly benefit looks like. You're entitled to your full monthly benefit based on your earnings record at full retirement age, or FRA, which kicks in at 66, 67, or somewhere in between, depending on your year of birth.

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Meanwhile, you can sign up for Social Security starting at age 62, but if you file for benefits ahead of FRA, they'll be reduced permanently. You can also delay your filing past FRA, and for each year you do, your benefits will increase 8%.

That incentive happens to run out at age 70. But if your FRA is 67, it means you have a chance to snag a 24% boost to your benefits -- for life.

It's for this reason that waiting until age 70 to claim Social Security is often a very good idea. But here's one scenario where waiting that long absolutely doesn't pay off.

Be careful when claiming spousal benefits

We just learned that Social Security benefits are based on individual earnings. But even if you were never a member of the labor force, you may be entitled to Social Security if you were or are married to someone who's eligible for benefits.

It's a concept known as spousal benefits, and it's something that serves as a financial lifeline for many retirees. In fact, if you're entitled to spousal benefits, you may be eligible to receive up to 50% of the benefit your spouse collects, provided you wait until FRA to file.

Let's say your spouse is entitled to $2,000 a month in Social Security. If you claim a spousal benefit at your FRA, you'll get $1,000 a month.

That said, delaying spousal benefits past FRA is something you shouldn't bother doing. Whereas it's possible to grow a personal Social Security benefit by waiting to file, that option doesn't apply to spousal benefits. So if you're thinking of claiming your spousal benefits at age 70, it's time to rethink that idea because waiting beyond FRA won't give you any more money. If anything, you might lose money by virtue of holding off.

Know the rules

The rules surrounding Social Security are tricky, and to be clear, there are many of them. But the more you read up on how the program works, the easier it'll be to avoid traps like the one above.

In fact, while filing for benefits at age 70 is a smart move in many cases, there are situations outside of a spousal benefits claim where waiting that long doesn't make sense. So it's important to arm yourself with as much information as possible to make the right call.

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