Social Security: 3 Terrible Reasons to File for Benefits at 67

Countless seniors rely on Social Security to pay their living costs in retirement. But while the payments you're entitled to are based on how much you earned during your working years, the age at which you first claim those benefits could impact how much you ultimately get.

Some people rush to take Social Security at 62 because it's the earliest possible age to get benefits. But if you're a current worker who was born in 1960 or later, you'll be eligible to receive your benefits in full starting at age 67. That said, 67 isn't necessarily the best age for you to claim Social Security. In fact, here are three reasons not to file at 67.


1. You need the money sooner

Many people work well into their 60s (or even beyond). As long as you have a steady paycheck coming in, there's no need to claim Social Security early. But if you lose your job or need the money for some other reason, waiting until age 67 to collect your benefits could hurt you.

According to Voya Financial, 60% of Americans end up retiring earlier than expected, often due to factors such as health problems, downsizing at work, or needing to care for a spouse or dependent. If you find yourself in need of money prior to age 67, it makes much more sense to file for benefits than rack up credit card debt or take out a high-interest loan to tide yourself over.

2. It's your designated full retirement age

Many workers start taking Social Security as soon as they reach full retirement age, since doing so allows them to collect their benefits in full. But just because you reach your full retirement age doesn't mean you're required to claim your benefits immediately. In fact, if you hold off on taking Social Security, you'll get an 8% boost for each year you delay those benefits. While the incentive to wait runs out at age 70, if you postpone your benefits for three years, you'll increase them by 24%, and that boost will remain in effect for the rest of your life. So if, for example, your full retirement age is 67 and your full benefit amount is $1,500 per month, waiting three years to collect Social Security will boost your monthly payments to $1,860 -- forever.

Of course, waiting until age 70 is only feasible if you have another source of income, whether it be from a job or your own independent retirement savings. But if you don't need the money at 67, then it pays to wait.

3. You're tired of working

More Americans are working or planning to work into their 70s these days, and for good reason. The longer you work, the more opportunity you'll have to sock away money for retirement, especially since the annual IRA and 401(k) contribution limits are higher for workers 50 and over. This year, older workers can put up to $6,500 into an IRA and $24,000 into a 401(k). Maxing out these contributions for a few extra years could work wonders for your retirement savings -- which is why you shouldn't rush to claim Social Security at 67 just because you're tired of working.

Working longer has its health benefits too. Some studies have shown that working longer can actually lead to a longer life, while retirement increases the likelihood of depression and physical illnesses alike.

Before you rush to collect Social Security at 67, think about whether you're tired of working at your specific job, or tired of working in general. If it's the former, you may want to go out and find work you actually like, as opposed to suffering through a job you don't enjoy. And if you're feeling burned out by the 40-hour-a-week grind, you might consider leaving your full-job and finding something part-time or cutting your hours at your current position. As long as you're not miserable and you're able to earn enough money to pay the bills, working a few more years in a different capacity will help you not only pad your savings, but accrue delayed retirement credits that will boost your Social Security benefits permanently.

While taking Social Security benefits at 67 makes sense for some people, it's not the right move for everyone. Before you rush to file at 67 or deny yourself the opportunity to take benefits sooner, think about your own needs and financial circumstances. Claiming Social Security at a different age, whether it be earlier or later, could be one of the smartest retirement moves you'll ever make.

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