3 Social Security Filing Choices That Could Work Wonders for You
It’s best to have income outside of Social Security at your disposal once you retire. While your monthly benefits might cover a big chunk of your bills, they probably won’t cover your bills in their entirety.
But still, you may end up relying heavily on Social Security once you’re no longer working. So it’s important to choose the right age to file for benefits, as that will impact the amount of money you get each month. Here are three filing options to look at that could be right for you.
1. File early and put your benefits to work
Many seniors opt to sign up for Social Security at age 62, which is the earliest age you can put in a claim for benefits. Filing at age 62 has the obvious perk of getting your money sooner. But it also means locking in a lower monthly benefit that you’ll generally be stuck with for the rest of your life.
That doesn’t necessarily mean you’ll lose out financially, though. If you file for Social Security at age 62 but invest your money rather than spend it, you might generate even more income — enough to support yourself throughout retirement.
And when we say “invest your money,” stocks aren’t your only option. You might invest in the small business you’ve always wanted to run. If it’s successful, it might not only bring you fulfillment throughout your retirement, but also, lots of revenue.
Similarly, you can invest in skills that allow you to earn money in retirement. Let’s say you were a teacher your whole life and now you’re only interested in a remote job as a retiree. Learning how to be a graphic or web designer could set you up with a way to make money from home, at your convenience.
2. Delay your filing for a higher monthly payday
You’re entitled to your full monthly Social Security benefit based on your earnings history at full retirement age (FRA), which kicks in at either 66, 67, or somewhere in between, depending on when you were born. But for each month you delay your filing past FRA up until 70, your monthly benefit gets a nice little bump.
Postponing your claim a couple of months may not result in a substantially higher benefit. But if your FRA is 67 and you delay your filing until age 70, you’ll boost your monthly benefit by 24% — for life. That could make it so your benefits are able to cover a lot of your senior living costs.
3. File on time and split the difference
Maybe the idea of claiming Social Security early and locking in a lower monthly benefit scares you. But maybe you also don’t want to wait until age 70 to get your money — because you can’t actually afford to retire until those benefits start rolling in.
If that’s the case, filing on time — meaning, at FRA — is a very reasonable choice. While you won’t boost your monthly benefit, you also won’t reduce it. And if you manage your income carefully and spend cautiously, you may find that your monthly benefit at FRA is enough.
What’s the right choice?
Deciding at what age to claim Social Security is difficult — there’s no question about it. Your best bet, therefore, is to weigh the pros and cons of different filing strategies and see where that takes you.
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