Should I Wait Until Age 70 to Collect Social Security?
Deciding when to start collecting Social Security benefits is a crucial financial decision that can significantly impact your retirement income. One common question that arises is whether it’s advisable to wait until age 70 to collect these benefits. This article delves into the factors to consider when making this decision, helping you make an informed choice for your retirement.
Understanding Social Security Benefits
Social Security is a federal program designed to provide income to retired workers, disabled individuals, and surviving family members. The amount of benefits you receive is based on your earnings history and the age at which you start collecting. The full retirement age (FRA) varies depending on your birth year, but it generally ranges from 66 to 67.
Advantages of Waiting Until Age 70
Waiting until age 70 to collect Social Security benefits offers several advantages:
1. Higher Monthly Benefits: By delaying your benefits, you can receive a higher monthly payment. This is because your benefits increase by a certain percentage each year until you reach age 70. This increase is known as the delayed retirement credit.
2. Increased Cost of Living Adjustments (COLA): Waiting until age 70 ensures that you receive the maximum COLA, which helps protect your purchasing power against inflation.
3. Potential for Increased Benefits for Spouses: If you’re married, waiting until age 70 can also benefit your spouse. Your surviving spouse may be eligible for a higher survivor benefit if you delay collecting your benefits.
Considerations Before Delaying Benefits
While waiting until age 70 offers advantages, it’s essential to consider the following factors before making a decision:
1. Health Status: If you have health concerns or a family history of early mortality, it may be beneficial to start collecting benefits earlier to ensure you receive income throughout your retirement.
2. Financial Needs: Assess your current financial situation and future needs. If you require additional income to maintain your lifestyle, starting benefits earlier may be more suitable.
3. Life Expectancy: Consider your life expectancy and the potential duration of your retirement. If you expect to live a long life, waiting until age 70 can provide a higher overall benefit.
Conclusion
Deciding whether to wait until age 70 to collect Social Security benefits depends on your individual circumstances. While delaying benefits can result in higher monthly payments and increased COLA, it’s crucial to consider your health, financial needs, and life expectancy. Consulting with a financial advisor can help you make an informed decision that aligns with your retirement goals.
