Many Social Security experts suggest waiting well beyond the earliest claiming age of 62 to take your retirement benefits. There can be good reasons to wait on Social Security, and for those who were born in 1960 or later, the full retirement age of 67 is a reasonable target to shoot for. Yet in some cases, there's nothing to gain and something to lose from waiting until you turn 67 to claim your benefits. If you fall into one of the categories below, look closely to see if you would benefit by making a different decision.
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1. You were born before 1960 and are claiming spousal benefits
There's a big difference between spousal benefits based on your spouse's work history and retirement benefits based on your own work history. Retirement benefits are eligible for delayed retirement credits, which boost your payout by 8% per year beyond your full retirement age. By contrast, spousal benefits do not get delayed retirement credits.
Therefore, if you expect to get spousal benefits and have a full retirement age that's less than 67, then you shouldn't wait. Instead, claim your spousal benefits immediately upon reaching your full retirement age. Doing anything else simply gives up monthly checks that you'd otherwise be entitled to receive, and you'll get no bump in your monthly payment in exchange for waiting.
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2. You're trying to maximize monthly payments for yourself and your surviving spouse after your death
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The Social Security system was set up with the idea that when you claim should be a revenue-neutral proposition for the average American. Claim early, and you get smaller payments but more of them during your lifetime. Claim later, and you'll get fewer payments, but they'll be larger.
However, one important aspect many people ignore is that your retirement benefit affects what your spouse will receive in survivor benefits after you pass away. That can change the math quite a bit, supporting a later retirement in many cases. Even if you don't think your life expectancy is above average, you can get more survivor benefits for your spouse if your spouse does have an above-average life expectancy. There's no way to be sure, but for some who can afford to wait, going beyond 67 can pay rewards.
3. If you are a surviving spouse and expect to claim the largest survivor benefit possible
Finally, one situation in which it can pay to claim your own retirement benefits as soon as possible rather than waiting until 67 is when you have the right to claim survivor benefits. Social Security lets you choose to claim either your own retirement benefit or your survivor benefit, leaving the other potentially to grow.
As an example, say that your early retirement benefit is $750 per month but you'd be entitled to take $1,000 in survivor benefits at full retirement age. If you take the survivor benefit at 62, then you'll suffer a reduction to between $796 and $829 per month, depending on your full retirement age. However, you can claim just your $750 monthly retirement benefit and then wait until full retirement age to get the full $1,000. If you're in a situation where you're entitled to both survivor benefits and your own retirement benefits, coordinating makes a lot of sense and can sometimes give you more money in total over your lifetime.
Figuring out the best time to claim Social Security is one of the toughest decisions you'll need to make. However, by keeping these situations in mind, you'll be able to see beyond simplistic advice that suggests blindly waiting and instead come up with the best answer for you.
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