How to delay your social security application until the age of 70 | Social Security

At the age of 62, if you have paid your taxes to the social security system, you can apply for retirement benefits. However, waiting until you reach full retirement age, which is typically 66 or 67, will result in a higher monthly social security allowance. People who postpone benefits until the age of 70 will receive the highest monthly amount possible. After age 70, there are no further increases to delay the benefit.

If you want to wait until the age of 70 to receive social security checks, consider the following guidelines:

  • Understand what you will receive.
  • Spend other accounts.
  • Create a financial plan.
  • Keep working.
  • Lower the cost of living.
  • Consider your spouse.

Understand what you will receive

The year you were born, the salary you earned during your working years, and the age you start drawing on Social Security will all affect the amount you receive. “For each year that you delay your social security benefit beyond the age of full retirement, you will receive deferred pension credits,” says Brandon Ashton, director of pension security at Cornerstone Financial Services in Southfield, Michigan. “These late retirement credits amount to 8% per annum in simple interest increases.”

The amount of the monthly allowance increases every year until the age of 70. If your full retirement age is 66 and you expect to turn 70 before applying for Social Security, you can expect to receive 32% higher allowances. Your Social Security statement lists an estimate of how much you can expect to receive if you start benefits at various ages.

Spend other bills

You may have retirement accounts that could be exploited, such as a 401 (k) or IRA, while you wait to start Social Security. “Never take more than you need to and make sure this strategy is benefiting you in the long run, otherwise it defeats the purpose of delaying your benefits,” says Ashton.

See your cash levels and easily accessible savings accounts. “Any retiree should develop a cash reserve of at least 12 months of spending before retiring,” says David Edmisten, founder and principal consultant of Next Phase Financial Planning in Prescott, Arizona. “This money allows you to meet all your expenses without having to withdraw from investments or start social security benefits.”

Savings and investment accounts can be accessed for three to five years as the application for social security is delayed. Retirees can “look to use CDs and bond interests, dividends from dividend-paying stocks, and potentially even sell valuable assets they have held for more than a year to generate additional money for retirement spending,” Edmisten says.

Create a financial plan

As you set a budget, you may want to consider an annuity to supplement your income for the next few years. “Annuities are contracts issued by insurance companies that can provide a guaranteed lifetime income in exchange for a lump sum payment,” says Ashton. There are different types of annuities and in many cases it is necessary to have sufficient funds up front. Under certain circumstances, you may be setting up annuity payments for the years between your retirement and the age of 70. “An example is someone who retires at age 55 and creates a fixed 15-year annuity,” says Kevin Lao, a financial planner and the founder of Imagine Financial Security in Jacksonville, Florida. ‚ÄúThis income will close the gap until the age of 70 and Social Security payments will begin. These annuities can be funded with retirement or non-retirement dollars.

Keep working

If you are in good health, you could continue to work beyond the age of 65 to maintain your home and lifestyle. “Most people have their peak earning years just before they retire,” Ashton says. “Waiting an extra year or two can not only help you earn deferred retirement credits, it can also work to increase your retirement accounts.” Once you are 50 or older, you can add an additional $ 6,500, on top of the $ 20,500 annual contribution for 2022, into your 401 (k), 403 (b) or 457 plan. You will also be eligible to contribute $ 1,000 in plus to a traditional Roth or IRA, above the 2022 limit of $ 6,000.

Lower the cost of living

By lowering your monthly expenses, you can extend your savings and live on less while you wait for Social Security to start at age 70. Downsizing is a strategy to reduce housing costs. “You might consider selling your home and buying a cheaper home or moving to a cheaper city for retirement,” Lao says. “This could create an infusion of tax-free money that you can use as an income bridge to Social Security.” The tax liability exclusion for a primary residence is $ 500,000 for a married couple and $ 250,000 for a single person. Other ways to reduce include paying off high-interest debt, canceling online subscriptions, and traveling and eating out less frequently.

Consider your spouse

If you and your spouse both qualify for Social Security payments, find out which benefit will be greater. You can choose to start receiving the smallest benefit and delay the largest payout. “You would like to delay the larger of the two benefits until the age of 70,” Lao says. The survivor’s pension entitles the spouse who lives longer to receive the greater of the two benefits. “This way the surviving spouse will have the greatest possible benefit for life,” Lao says.


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