Should I collect social security at 67 or 70? This is a question that many retirees face as they approach the age of eligibility for this important government benefit. The decision can significantly impact your financial security and lifestyle in retirement, so it’s crucial to weigh the pros and cons before making a choice.
Social security is a vital component of the retirement planning process for many Americans. It provides a guaranteed income stream that can help cover living expenses during your golden years. However, the age at which you begin collecting benefits can have a substantial impact on the amount you receive each month.
At the age of 67, you become eligible to collect your full retirement age (FRA) benefits. This is the age at which you are entitled to receive the maximum monthly benefit. If you choose to collect benefits at 67, you will receive your full FRA amount, which is calculated based on your earnings history and the age at which you began working.
On the other hand, waiting until 70 to collect your benefits can result in a higher monthly payment. For every year you delay collecting benefits beyond your FRA, your monthly payment increases by a certain percentage. This increase is known as a delayed retirement credit (DRC), and it can significantly boost your overall retirement income.
There are several factors to consider when deciding whether to collect social security at 67 or 70. Here are some key points to keep in mind:
1. Health Considerations: If you anticipate a shorter lifespan or have health issues that may limit your retirement years, collecting benefits at 67 may be more beneficial. However, if you expect to live a long and healthy life, waiting until 70 could provide a higher monthly payment to sustain you through your later years.
2. Financial Needs: Consider your current financial situation and future needs. If you require additional income to maintain your lifestyle, collecting benefits at 67 may be the better option. However, if you have other sources of income or substantial savings, waiting until 70 could be more advantageous.
3. Spousal Benefits: If you are married, the decision may also affect your spouse’s benefits. In some cases, waiting until 70 to collect your own benefits can maximize the survivor benefit for your spouse, especially if you have a longer life expectancy.
4. Market Conditions: If you have investments or other assets that generate income, consider the current market conditions. If the market is performing well, you may be able to wait and collect a higher monthly payment. Conversely, if the market is volatile or expected to perform poorly, collecting benefits at 67 may be a safer option.
In conclusion, the decision of whether to collect social security at 67 or 70 depends on your individual circumstances and priorities. It’s essential to carefully consider your health, financial needs, and long-term goals before making this important choice. Consulting with a financial advisor or retirement planner can provide additional insights and help you make the best decision for your situation.
