Social Security is a vital source of income for many retirees. A recent Gallup poll found that 59% of retirees consider their monthly benefit check an important part of their income. To make the most of the program, it’s best to delay claiming benefits for as long as possible.
Data from 2022 shows that less than 10% of new Social Security claims were made by people aged 70 or older. The most common age to claim is 62, the earliest age most people qualify for retirement benefits. In some cases, claiming early at 62 may make sense.
This could be a good option if you have a health condition that reduces your life expectancy or need extra money to cover basic needs. However, for most people, delaying benefits is better. If you start receiving Social Security early but later find your situation has changed or you no longer need the income, you may be able to withdraw your claim.
You have one year from being approved for benefits to file a withdrawal request. It will be as if you never applied, and your monthly benefit will increase for each month you live past 62 and apply. There are some catches, though.
Delaying Social Security benefits benefits
You must repay all the money you and your family received from Social Security, including taxes and Medicare premiums. You have 60 days to revoke the withdrawal if you can’t repay the full amount.
Also, you can only withdraw or cancel your Social Security claim once in your lifetime. If you miss the deadline to withdraw your application, can’t repay the funds, or have already filed a second claim, you can still boost your monthly benefit. When you reach your full retirement age, between 66 and 67 depending on your birth year, you can choose to suspend your benefits.
For every month your benefits are stopped, you’ll get a 2/3 of a percentage point increase in your monthly payment, up to age 70. So someone with a full retirement age of 67 could see payments go up by as much as 24%. Keep in mind that if you have a spouse or child receiving benefits on your record, they won’t get those same benefits during the suspension period.
This could reduce your total income. Also, you’ll need to pay Medicare Part B premiums directly since they’re usually withheld from Social Security checks. If you’re ready for these risks, delaying benefits until your full retirement age can be a smart way to increase your Social Security income.
Understanding the rules and options available can help you make the most of this important retirement benefit.
