When it comes to signing up for Social Security, seniors get options. You could file as early as age 62, but doing so will result in a reduced monthly benefit for life. If you want your full monthly benefit based on your personal wage history, you'll need to wait until full retirement age (FRA) arrives. That age is 67 if you were born in 1960 or later.
There's also the option to delay your Social Security claim past FRA. For each year you do, your benefits get an 8% boost.
Once you turn 70, however, you can no longer rack up the delayed retirement credits that result in boosted benefits. So 70 is generally considered the latest age to claim Social Security, even though you're technically allowed to file beyond then.
Of course, waiting until 70 to sign up for Social Security isn't easy. But here's why it may be worth it.
1. The higher benefit might do you a world of good
The scary thing about retirement from a financial standpoint is that you don't know how long you're going to live. And while you should want to root for a long life, the more years you spend in retirement, the greater your chances of running out of savings at some point.
The upside of waiting until 70 to claim Social Security is that you'll get a boosted benefit for life. That way, you won't have to dip into your savings as much to cover your ongoing expenses. And if your nest egg does run dry at some point, you'll have a higher benefit to live on once that happens.
2. Working longer could help you build up more savings
Claiming Social Security at age 70 doesn't always mean retiring at age 70. It's certainly possible to retire at a younger age and simply wait to collect that money.
But many people intentionally postpone retirement until their Social Security checks begin to arrive. And if you do that, it might do a world of good for your nest egg.
Working a few extra years will leave your savings untapped for a few extra years. Just as importantly, you might have an opportunity to sock away some of your salary in your 401(k) or IRA to grow your balance a bit more before bringing your career to a close.
An important decision to make
Filing for Social Security at age 70 isn't the right choice for everyone. If your health is in poor shape, for example, then claiming Social Security at 70 may not be such a great idea, because if you don't live very long, you might lose out on lifetime Social Security income despite a boosted benefit on a monthly basis. And if you lose your job in your early 60s, you might have to claim benefits around that time to make ends meet.
But it's a good idea to consider the perks of a boosted monthly benefit before you make your choice. You may find that having more money coming your way every month gives you not only more financial flexibility, but peace of mind.