When it comes to signing up for Social Security, you get choices. The earliest age to start collecting benefits is age 62. But if you file for Social Security at that age, you'll slash your monthly benefit for life.
In fact, you're not entitled to your full monthly Social Security benefit on your personal wage history until full retirement age (FRA) arrives. That age is either 66, 67, or 66 and a certain number of months, depending on the year in which you were born.
The Social Security Administration (SSA) will also reward you if you choose to delay your filing past FRA. For each month you do, you'll receive delayed retirement credits that amount to 8% per year.
Image source: Getty Images.
Once you turn 70, however, you can't build up those credits any longer. So 70 is generally referred to as the latest age at which to claim Social Security, even though you're not required to do so.
But while it's true that you can't accrue delayed retirement credits beyond age 70, that doesn't mean the monthly benefit you lock in at age 70 is the benefit you're stuck with for life. There's still one move you can make that could result in a higher monthly benefit down the line.
Working later in life has its benefits
These days, many Americans are living and working longer -- partly because they can, and partly for the financial benefits. If you're still working at age 70, it pays to claim Social Security, regardless of what your paycheck looks like, since there's no financial sense in delaying your filing any longer. But if you keep working into your 70s and earn a nice wage, you might boost your Social Security benefit by virtue of your higher earnings.
The SSA takes your 35 highest-paid years of wages into account when calculating the monthly Social Security benefit you're entitled to. Meanwhile, if you file for benefits at age 70 but keep working, the SSA will review your earnings each year to see if recent wages render you eligible for a higher monthly benefit. If so, your benefit will be bumped up.
Let's say you're 70 years old earning $100,000 a year. If you continue earning that salary for the next five years before retiring, you might replace five years of wages in the $50,000 range with that six-figure income in your personal Social Security benefits calculation.
A great position to be in
Some people are forced into early retirement due to factors like job loss and health issues. If you have the option to keep working into your 70s, doing so could have many positive financial results. Not only might working longer allow you to boost and preserve your nest egg, but it could also be your ticket to getting more money from Social Security on a monthly basis -- for the rest of your life.
Plus, working longer could have physical and social benefits, too. All told, if you're able to keep plugging away at a job well into your 70s, it's an option worth considering.
