Will you delay claiming Social Security benefits until age 70? If your answer is, “No, way,” you’re not alone. According to a recent retirement survey, the vast majority of pre-retirees who responded said they plan on filing for Social Security either early (between ages 62 and 65) or when they hit their full retirement age (FRA).
Only 11% Of People Age 60 to 65 Said They Planned To Delay Till 70
That’s quite amazing. With 86% of respondents reporting they are fully aware that waiting until 70 increases their Social Security check, only 11% in the 60 to 65 age group said they planned to delay to maximize their benefit.
Why are so many refusing to wait? Roughly one-third are concerned that the Social Security program will run out of money long before they reach age 70. Another third said they’ll simply need the money to cover the cost of inflation. ‘
“If you were born in 1943 or later, each year you wait beyond your FRA, the amount of check will increase by 8%. When you do the math, it all adds up to a sizeable increase for the rest of your life.”
FERS Retirees Are Better Positioned To Delay Social Security Benefits
As a federal employee covered under FERS, you have three sources of retirement income: your monthly annuity, the Thrift Savings Plan and Social Security. This puts you in a better position to wait until age 70 for Social Security because you have other sources of income.
If you were born in 1943 or later, each year you wait beyond your FRA, the amount of check will increase by 8%. When you do the math, it all adds up to a sizeable increase for the rest of your life. Another fact to consider – when you delay until 70, your spouse will receive the larger Social Security benefit when you pass away.
You Can Delay Until 70 Even After Receiving The FERS Supplement
The FERS Supplement fills the income gap between your retirement and age 62, which is when you first become eligible for Social Security. Let’s say you retire with an immediate annuity at age 60 with 20 years of creditable service. You would be eligible to receive the FERS supplement for the next two years.
Once you turn 62, your FERS Supplement stops. Now, you have the flexibility to file for Social Security early and receive a reduced benefit. Or, you can wait until your FRA to get 100% of your benefit. Or, you can delay filing until 70 to maximize your benefit.
If you’re only five years away from retirement, waiting a few extra years to switch on your Social Security benefits may be your best strategy. Especially if longevity runs in your family.
