By Russell Gloor, National Social Security Advisor at the AMAC Foundation, the non-profit arm of the Association of Mature American Citizens
Dear Rusty: I could use some advice on whether or not I should start collecting my Social Security benefits now. I am 67 and 3 months old, and plan to continue working for at least for the next year or two. Signed: Seeking Answers
Dear Seeking: Deciding when to claim Social Security is, indeed, an important decision, as it will affect you for the rest of your life. Mainly, deciding when to claim your SS retirement benefit should consider your financial needs, but your life expectancy and marital status are equally important.
At your current age (past your full retirement age of 66 years & six months) you are already earning Delayed Retirement Credits (DRCs) at the rate of .677% higher benefit for each month you continue to delay. That adds up to an additional 8% benefit for each full year you wait beyond your FRA to claim, and that growth will continue until you are 70 years old. At that point, your benefit will be 28% higher than it would have been at your full retirement age (FRA). If you expect to achieve about “average” life expectancy (about 84 for a man your current age), then waiting until 70 to claim will get you both a higher monthly amount and the most you can get in cumulative lifetime benefits. Waiting, however, only makes sense if you expect at least average longevity. If your health is poor and you have reason to believe you won’t live to the “average,” then claiming earlier makes more sense. FYI, you may find this tool helpful to determine your potential life expectancy: https://socialsecurityreport.org/tools/life-expectancy-calculator/.
You can, of course, simply delay claiming for as long as you are still working, and then file for benefits at that time. When your paychecks stop is frequently the best time to start your SS benefits (to supplement the lost work income). And, if you are married and your wife will be entitled to a survivor benefit from you, then waiting longer to claim enhances the benefit your surviving spouse receives at your death (your surviving spouse would get your benefit amount, instead of her own smaller amount). If that is a consideration, then waiting – at least until you stop working (or age 70 if feasible) is often a prudent choice.
So, the choice is yours to make, considering your financial needs, life expectancy, and marital status. You no longer need to worry about Social Security’s annual earnings test (for those collecting benefits before their FRA) but, if it is financially feasible, waiting still longer will mean a higher monthly benefit for the rest of your life.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.
