If you delay Social Security income after your full retirement age (FRA), you can get more each month. The SSA rewards you for waiting to take retirement income with a raise that amounts to up to 8% per month.

That’s a big difference, and it’s a powerful way to maximize your Social Security income. That higher monthly income lasts for the rest of your life, and if a surviving spouse takes over your income payments, they will also get the increased amount. So, delaying Social Security benefits can benefit you as well as your loved ones.

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This video covers some of the basics of waiting to take benefits. You can delay until age 70, but after that, the increases stop, so there’s no point in waiting. And the extra income won’t affect a spouse who takes a spousal benefit off your work record (but again, it is helpful for survivors who take over your benefit after your death).

Some resources discussed in this video:
SSA:
Medicare enrollment timing:

See more details about how this works in the video. We’ll cover the timing of increases, how much exactly you get each month, and much more. Of course, this is just a general overview, so it’s critical to triple-check everything with the Social Security Administration and your own financial planner before making any decisions. And if you’re worried about Social Security running out of money—so you want to get your benefit as soon as possible—we’ll touch on whether or not that might be best.

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Justin Pritchard, CFP® is a fee-only fiduciary advisor who can work with clients in Colorado and most other states.

CHAPTERS:
0:00 Intro
0:22 Your Full Retirement Age (FRA)
0:51 Delaying Social Security After FRA
1:22 Example of Timing Benefits
1:58 Surviving Spouse Benefit After Delaying
2:20 COLA and Inflation When You Delay
2:45 Spousal Benefits
3:06 Increases Build Monthly
3:41 What if You Already Claimed? Suspend Payments?
4:09 Avoid Medicare Penalties as You Delay Claiming
4:39 How Do You Afford Retirement as You Delay Social Security?
5:20 What if Social Security Is Running Out of Money?

IMPORTANT:
It’s impossible to cover every detail and topic in a video like this. The only thing that’s certain is that you need more information than this. Always consult with a CPA before making decisions or filing a tax return. This is general information and entertainment, and is not created with any knowledge of your circumstances. As a result, you need to speak with your own tax, legal, and financial professional who is familiar with your details. This video is not a substitute for individualized, personal advice. Please verify with your plan administrator when employer plans are involved. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Investments are not bank guaranteed and may lose money. Opinions expressed are as of the date of the recording and are subject to change. The Comments section contains opinions that are not the opinions of Approach Financial, Inc., and you should view all comments with skepticism. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration….(read more)

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Social Security is a retirement benefit that millions of Americans rely on. There are many factors that go into deciding when to begin collecting Social Security benefits, including income needs, life expectancy, and health status. One common question that many people ask is, “What happens when you delay Social Security?”

First, it’s important to understand how Social Security benefits work. Social Security is a government program that provides retirement, disability, and survivor benefits to eligible individuals. The amount of your benefit is based on your earnings history, and you must have worked and paid Social Security taxes for a certain number of years to be eligible for benefits.

The age at which you begin collecting Social Security benefits can have a significant impact on the amount of your benefit. If you start collecting benefits at the earliest age possible, which is currently 62, your monthly benefit will be reduced by about 30% compared to what you would receive if you waited until your full retirement age (which is currently between 66 and 67, depending on your birth year).

However, if you delay collecting benefits past your full retirement age, your benefit will increase by a certain percentage each year until you reach age 70. Currently, the increase is 8% per year for those born in 1943 or later. This means that if you delay collecting Social Security until age 70, your monthly benefit will be about 32% higher than if you had started collecting at your full retirement age.

So, what happens when you delay Social Security? The main benefit is a higher monthly benefit when you do start collecting. This can be especially advantageous if you expect to live a long time, since the increased benefit can add up over many years.

Delaying Social Security can also be a smart financial move if you’re still working and earning income. If you start collecting Social Security before your full retirement age and you’re still working, your benefit will be reduced if you earn more than a certain amount ($18,960 in 2021). However, if you delay collecting benefits until your full retirement age or later, there’s no limit on how much you can earn without reducing your benefit.

Another advantage of delaying Social Security is that it can provide a “safety net” of sorts. If you wait to collect benefits and find that you need more income later in retirement, you’ll have a higher Social Security benefit to rely on. This can be especially valuable if you’ve exhausted other sources of retirement income, such as savings or pensions.

Of course, there are also potential drawbacks to delaying Social Security. For one, you’ll have to rely on other sources of income until you start collecting benefits, which can be challenging if you don’t have a substantial retirement nest egg. Additionally, if you delay collecting benefits and pass away before you start collecting, you may have missed out on years of potential benefit payments.

In the end, the decision of when to collect Social Security benefits is a personal one that depends on many factors. However, it’s important to understand the potential advantages and disadvantages of delaying benefits, so that you can make an informed decision that’s right for you.