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If You Delay Retirement, You Should Also Delay This


For many reasons, including rising costs of living and longevity, Americans are delaying their retirement. While workers in the past would try to hang it up at around 62, workers now are frequently planning on working into their 70s.

If you’re one of those people considering delaying your retirement, there’s another thing you should make sure you do: Delay taking Social Security.

For more help figuring out your personal retirement plans, consider matching with a vetted financial advisor for free.

Benefits of Delaying Starting Social Security

SmartAsset: If You Delay Retirement, You Should Also Delay This

Social Security is a government program designed to help seniors cover the cost of living in retirement. It was started under President Franklin Delano Roosevelt in the 1930s, part of his New Deal to combat the Great Depression. Workers pay taxes to feed the Social Security fund throughout their working life and are sent a monthly check in retirement. The amount they receive each month is determined by how long they worked and how much they contributed during their working years.

The longer you wait to file for Social Security, the more you’ll get each month. This is especially true for anyone thinking of filing below the full retirement age (FRA), which is generally either 66 or 67, depending on when you were born. If you’ll be under the FRA for the entire year, the Social Security Administration will withhold $1 from your check for every $2 you earn over $19,560 in 2022. If you’ll reach your FRA in 2022, you lose $1 from your check for every $3 you earn over $51,960, if you hit that amount before your birthday.

Even once you’ve reached full retirement age, though, it makes sense to delay starting Social Security payments until you’ve reached age 70, as that’s when you start to get your full benefit. With the 8.7% COLA boost for 2023, delaying Social Security is all the more lucrative. Given that you are still working, you shouldn’t need to take your Social Security payment until that age. Once you turn 70, feel free to start getting Social Security even if you are still working.

Bottom Line

SmartAsset: If You Delay Retirement, You Should Also Delay This

Though you can start taking Social Security once you turn 62, if you’re still working you should delay as long as possible — until age 70 if you can swing it. Once you turn 70, you’ll have qualified for your full benefit. Since you’ve delayed retirement, holding off on taking payments till age 70 should be doable.

Retirement Planning Tips

  • A financial advisor can help you figure out how to work Social Security into your retirement plan and how long you can delay retirement. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • It’s important to know exactly how much money you’ll need in retirement. SmartAsset’s free retirement calculator can help you figure out how much you’ll need and if you are on track.
  • Social Security probably won’t be enough for you to survive on in retirement. Make sure you’re saving enough to make up the gap — either through a workplace retirement plan like a 401(k) or with an individual retirement account.

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