Should you wait until 70 to collect social security?
In the United States, the decision to collect social security benefits at age 70 is a significant one that can have long-term financial implications. Many individuals are unsure whether it is advantageous to delay their benefits or to start receiving them as soon as they are eligible. This article aims to explore the advantages and disadvantages of waiting until 70 to collect social security, helping you make an informed decision.
Advantages of Waiting Until 70 to Collect Social Security
1. Higher Monthly Benefits: By waiting until age 70 to collect social security, you can significantly increase your monthly benefits. Social security benefits increase by approximately 8% each year you delay collecting them beyond your full retirement age (FRA), which is typically between 66 and 67 for most individuals.
2. Inflation Protection: Social security benefits are adjusted for inflation each year. By waiting until age 70, you ensure that your benefits will be adjusted to keep pace with rising prices, providing you with a more substantial income in the long run.
3. Longer Lifespan: If you expect to live a long life, waiting until age 70 to collect social security can be beneficial. This is because you will receive more monthly benefits over a longer period, potentially resulting in a higher overall lifetime benefit.
Disadvantages of Waiting Until 70 to Collect Social Security
1. Reduced Early Benefits: If you start collecting social security benefits before age 70, you may receive a reduced monthly benefit. This reduction is permanent and can significantly impact your income in the early years of retirement.
2. Financial Strain: Waiting until age 70 to collect social security can put you at a financial disadvantage if you need income to cover living expenses. This is especially true if you have limited savings or other sources of income.
3. Health Concerns: If you have health issues or concerns about your longevity, waiting until age 70 to collect social security may not be the best option. In such cases, it may be more beneficial to start receiving benefits earlier to ensure financial stability.
Conclusion
The decision to wait until age 70 to collect social security depends on various factors, including your financial situation, health, and life expectancy. While waiting until age 70 can result in higher monthly benefits and inflation protection, it may also lead to financial strain or reduced early benefits. It is essential to weigh the pros and cons carefully and consider consulting with a financial advisor to make the best decision for your unique circumstances.
