There's a reason some seniors are sometimes motivated to delay their Social Security filings. For each year you delay your filing beyond full retirement age (FRA), your monthly benefit gets an 8% boost. And that boost is yours to enjoy on a permanent basis.
Now the delayed retirement credits you'll accrue for holding off on Social Security run out once you turn 70. So if your FRA is 67 (which is the case if you were born in 1960 or later) but you claim Social Security at age 70, your benefits will get a 24% increase for life. And that's a pretty sweet deal.
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The problem with delaying Social Security, though, is that in many cases, it also means having to keep working longer. A lot of people simply can't afford to retire without having Social Security income to fall back on.
But you should know that delaying your Social Security claim does not have to mean delaying retirement simultaneously. Under the right circumstances, you may be able to retire on time and file a Social Security claim several years later.
When you're able to retire on schedule
You may have the goal of retiring once FRA rolls around. But you may also want the promise of a higher monthly Social Security benefit for life. The good news is that you can have the best of both worlds, provided you have savings or other assets to tap.
Let's say you've managed to save well for retirement but aren't necessarily sitting on a $2 million nest egg. What you may be able to do is retire on time, live modestly for a few years while dipping into your savings, and then upgrade your lifestyle once you file for Social Security and have more money coming in.
Even if you don't have savings, let's say you're sitting on a paid-off home with more square footage than you need. You may be able to downsize to a smaller one and buy it outright after selling your home, all the while pocketing a few hundred thousand dollars. You could then retire on time, delay Social Security, and live off of that money for a period of time until you're ready to sign up for benefits.
And finally, don't discredit the spending power part-time work might give you. If you can find a gig or part-time job that gives you just enough money to pay the bills, then you won't have quite the same work schedule as you did with a full-time job. But you'll have the option to delay Social Security and snag a higher monthly benefit for life.
You may have more choices than expected
For some people, the decision to delay Social Security also means delaying their workforce exit. But it doesn't have to be like that.
Depending on your situation, it may be more than possible to hold off on claiming Social Security while getting to retire at the time you always wanted. You might have to make a few adjustments to your plans, but it's doable.
