What's Happening
33 minutes ago

Mark Zuckerberg Follows Elon Musk's Footsteps As Meta Reportedly Plans Major Investment Into AI-Powered Humanoid Robots

benzingabenzinga.com
1 hour ago

Do You Know How Long $1 Million Will Last If You Retire At 65? Here's A Hint – Longer Than You're Led To Think!

benzingabenzinga.com
1 hour ago

IRS Reportedly Gears Up To Lay Off Thousands Of Workers Elon Musk's DOGE Looks To Shrink The Tax Agency

benzingabenzinga.com
2 hours ago

TRADEPULSE POWER INFLOW ALERT: PALO ALTO NETWORKS INC. (PANW) MOVES UP OVER 5% AT ITS HIGH AFTER TRADEPULSE ALERT

benzingabenzinga.com
3 hours ago

Jeff Bezos-Backed Anthropic Fights US Proposal Blocking Google From Investing In AI Startups, Says It Would Benefit Rivals OpenAI, Mark Zuckerberg's M...

benzingabenzinga.com
3 hours ago

Trump Administration 'Unlikely' To Support TSMC's Control Of Intel's US Chip Factories: Report

benzingabenzinga.com
4 hours ago

Trump's 'Liquid Gold' Plan: Can He Really Make America Rich Again, or Do Oil Giants Hold the Real Power?

benzingabenzinga.com
5 hours ago

Elon Musk's Government Gig Has No Salary, No Job Title, And Plenty of Power

benzingabenzinga.com
6 hours ago

Why Altcoins Were Winning This Week

foolfool.com
6 hours ago

Russell Vought Orders Pause On All CFPB Activity, Critics Say This Gives Corporations 'The Green Light To Scam Families'

benzingabenzinga.com
6 hours ago

Prediction: Zillow Will Beat the Market. Here's Why.

foolfool.com
6 hours ago

$1000 Invested In Super Micro Computer 15 Years Ago Would Be Worth This Much Today

benzingabenzinga.com
6 hours ago

'We're Going To Find Billions' – Trump Targets Pentagon For Deep Spending Cuts

benzingabenzinga.com
6 hours ago

Here's How Much You Would Have Made Owning Meta Platforms Stock In The Last 10 Years

benzingabenzinga.com
7 hours ago

If You Invested $1000 In This Stock 15 Years Ago, You Would Have This Much Today

benzingabenzinga.com
7 hours ago

Why Siemens Stock Crept Higher on Friday

foolfool.com
7 hours ago

Here's How Much You Would Have Made Owning Regeneron Pharmaceuticals Stock In The Last 15 Years

benzingabenzinga.com
7 hours ago

This Magnificent Artificial Intelligence (AI) Stock Delivered Stellar Gains in 2024. It Can Jump Another 60%

foolfool.com
7 hours ago

Here's How Much You Would Have Made Owning American Tower Stock In The Last 20 Years

benzingabenzinga.com
7 hours ago

Why Federal Realty Investment Trust Stock Just Tanked by 6%

foolfool.com

Delaying Social Security? Here’s Why That’s a Riskier Move Than You’d Think.

There’s a reason the decision to claim Social Security is such a difficult one. Though your wage history will help dictate what monthly benefit you’re entitled to, your filing age will also play a role in determining how much money you get each month in retirement. So it’s important to make a smart decision from the start.

Now you have plenty of choices when it comes to taking benefits. The earliest age to claim Social Security is 62, and you get your complete monthly benefit at full retirement age, which, depending on your year of birth, is 66, 67, or somewhere in the middle of those two ages.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

A person on a couch holding documents and using a calculator.

Image source: Getty Images.

There’s also the option to delay your Social Security claim past full retirement age. For each year you do, up until age 70, your monthly benefits grow 8%. This means that at a minimum, filing at age 70 will boost your monthly payments by 24%.

You may be inclined to delay your Social Security claim if you like the sound of that. But you should know that there’s a risk involved that could make it a less optimal choice.

You’re betting on your own longevity

It’s true that delaying Social Security will put more money in your pocket on a monthly basis. The big question, though, is whether it will give you more money on a lifetime basis. And if you end up passing away at a younger age than expected, a delayed filing could result in a lower total benefit from Social Security than what you could’ve gotten by signing up earlier.

Say you’re eligible for $2,200 a month in Social Security at age 67. If you push your claim off until age 70, you’ll bump up your monthly benefit to $2,728. And yes, that’s a nice boost. But if you don’t live long enough to make up for those three years of not getting benefits in between, you stand to lose out financially.

That’s why delaying Social Security means taking a risk. And you’ll need to decide whether waiting is worth it.

If your health is fantastic, it could make sense to sit tight and claim benefits beyond full retirement age. But if you’re worried about doing that, or your health isn’t stellar, then an earlier filing could be more suitable.

Calculate your break-even age no matter what

If you’re not sure whether delaying Social Security makes sense for you, one thing it pays to do is calculate your break-even age. That’s the age when you’d get the same lifetime benefit regardless of whether you file sooner or later.

In our example, you’d be looking at a total lifetime payout of $409,200 at age 82 1/2 based on a monthly benefit of $2,200 starting at 67 versus $2,728 starting at 70. So if you think you’ll live beyond that break-even age, then it pays to delay Social Security until 70. If you’re not sure, you may want to file at 67.

Or, you could meet in the middle. But you shouldn’t make that decision without first running the numbers. And it’s important to understand that the simple act of delaying Social Security is a risk, even if it’s a calculated one.

The $22,924 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

View the “Social Security secrets” »

The Motley Fool has a disclosure policy.

Related Posts

Social Security is an essential piece to most American’s retirement plans. Without their monthly benefits, some 16.3 million seniors U.S, would be living below the

The average retirement age in the U.S. was 62 in 2023, but that number’s been slowly ticking up over time. Rising life expectancies and rising

While the stock market is still thriving, some investors may be feeling wary about the future. Spiking inflation could cause the Federal Reserve to shift

There are plenty of ways to become a millionaire, like starting a successful business, being a professional athlete, or becoming a movie star. For most