When to Claim Social Security: Delaying Boosts Lifetime Benefits
Americans approaching retirement age face a crucial decision: when to claim social security benefits. The timing significantly impacts the monthly checks they'll receive for the rest of their lives. Here's a breakdown of the key factors to consider.
Social security benefits increase by 2/3 of 1% per month after the full retirement age (FRA), reaching a maximum at age 70. This means that those who delay claiming until 70 receive the biggest lifetime benefit, with checks up to 124% of the FRA benefit. Over 90% of Americans maximise their benefits by following this strategy.
However, claiming early can make sense in certain situations. If delaying would cause financial hardship or an unexpected health crisis shortens life expectancy, it might be best to claim early. Be aware that claiming before the FRA reduces checks: by 5/9 of 1% per month for up to 36 months, then by 5/12 of 1% per month thereafter. For instance, claiming at 62 reduces checks by 30% if the FRA is 67, dropping a $2,000 monthly check to $1,400.
It's also important to consider the impact on survivor benefits. Claiming early reduces the benefits that family members may receive after your death.
The decision to claim social security benefits early or late has long-lasting effects. While delaying can lead to bigger checks, claiming early can be beneficial in certain circumstances. It's okay to claim early if you wish, but understanding the impact on your checks and survivor benefits is crucial. The FRA, currently 67 for those born in 1960 or later, determines the full benefit based on work history.
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