If you can put off claiming Social Security money for a few years, you can get higher monthly checks for the rest of your life.
As CNBC reports:
Delaying your Social Security is one of the best ways to expand your retirement income. Your monthly check from the government will often be three-quarters larger if you claim at 70 instead of at 62, said Laurence Kotlikoff, an economics professor at Boston University and the author of “Get What’s Yours: The Secrets to Maxing Out Your Social Security.”
How can you fund the income gap during the years you aren’t claiming Social Security? CNBC suggests IRA withdrawals, which you can start taking at age 59 1/2.
More than a third of beneficiaries who claim their Social Security before 66 — the current full retirement age for most people — have enough money in an IRA to finance the equivalent of at least two years of Social Security benefits, the researchers found. A quarter of them had enough to finance at least four years.
You can also fund the gap with personal investments, savings, money earned from downsizing to a smaller home, etc. You could even stay at your job for a few more years—which many of us are planning to do regardless—or pick up a side hustle.
If you can’t make it a few years without Social Security, even delaying retirement for a short period of time (like, half a year) can increase those Social Security checks. Waiting pays off—literally.
I know it’s a little hard for some of us to imagine what our retirement might look like, especially if we’re millennials who have been told that Social Security might not even be around when we retire. Still, if you’re approaching retirement age and have enough to live on without claiming your Social Security income, putting it off for now can yield larger checks in the future.