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Should you wait to apply for Social Security benefits?

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Should you wait to apply for Social Security benefits?

If you have worked for years or even decades and are approaching Social Security’s full retirement age, you may be itching to start collecting your benefits. After all, additional income may help you pay for the comparatively high cost of living along the Front Range.

While your approach to Social Security planning is largely a personal choice, delaying your Social Security benefits may be a better approach. Still, because these benefits may affect your estate plan, you should probably make a decision and stick to it.

The full retirement age

To qualify for Social Security benefits, you must accumulate 40 work credits during your career. This means you must pay Social Security taxes during 10 years of work. Social Security’s full retirement age is the age you may stop working and collect the benefits you have earned.

Your full retirement age depends on your date of birth. If it was between 1943 and 1954, your full retirement age is 66. If your birth date was in 1960 or later, however, you do not reach full retirement age until you are 67. If your birth date falls between 1955 and 1959, your full retirement age is 66 years and some number of months.

Late retirement

You are under no legal obligation to collect your Social Security benefits when you reach full retirement age. If you wait, you are likely to receive higher monthly payments. In fact, your payments may increase by as much as 8% per year until your 70th birthday.

Ultimately, by electing to delay receipt of your Social Security benefits, you may have additional income either to use during the rest of your life or to pass on to your loved ones.