Is It Necessary to Start Collecting Social Security Benefits at Age 70-

by liuqiyue

Do you have to collect social security at age 70?

When it comes to retirement planning, one of the most common questions people have is whether they are required to start collecting Social Security benefits at age 70. The answer is not straightforward and depends on various factors, including individual circumstances and financial needs. In this article, we will explore the reasons behind the age 70 threshold and whether it is necessary to collect Social Security benefits at this age.

Understanding the Age 70 Threshold

The age of 70 was established as the full retirement age (FRA) for Social Security benefits due to changes in the Social Security Act of 1983. The FRA is the age at which you can receive your Social Security benefits without any reduction in benefits. If you were born before 1938, your FRA is 65. For those born between 1938 and 1959, the FRA gradually increases, reaching 67 for those born in 1960 or later.

Why Collect Social Security at Age 70?

The primary reason to consider collecting Social Security benefits at age 70 is to maximize your monthly income. If you delay collecting benefits beyond your FRA, your monthly benefit amount increases by a certain percentage each year. This increase is known as delayed retirement credits, and it applies until you reach age 70.

The formula for calculating the delayed retirement credits is as follows: 8% per year for each year you delay collecting benefits beyond your FRA. For example, if your FRA is 67 and you decide to collect benefits at age 70, your monthly benefit would be 124% of your primary insurance amount (PIA).

When Should You Collect Social Security Benefits?

The decision to collect Social Security benefits at age 70 or delay them depends on several factors:

1. Financial needs: If you require additional income to cover your expenses, it may be necessary to start collecting benefits at age 70.
2. Health considerations: If you anticipate a shorter life expectancy, it may be more beneficial to start collecting benefits earlier rather than later.
3. Spousal benefits: If you are eligible for spousal benefits, you may need to consider the timing of collecting your own benefits to maximize your overall benefits.
4. Life insurance: Delaying Social Security benefits can provide a form of life insurance, as your surviving spouse may receive a higher benefit if you pass away before collecting your benefits.

Conclusion

In conclusion, while it is not a requirement to collect Social Security benefits at age 70, it can be a strategic decision to maximize your monthly income. Understanding the reasons behind the age 70 threshold and considering your individual circumstances will help you make an informed decision about when to start collecting your Social Security benefits. It is essential to consult with a financial advisor or Social Security representative to determine the best course of action for your specific situation.

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