Still Working at 67? Every Year You Wait on Social Security Locks In a Guaranteed 8% Raise
Still punching the clock at 67 means you have a rare window to permanently supercharge your retirement income, but most workers never take advantage of it.
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If you were born in 1960 or later, age 67 represents a big milestone in the context of retirement. It’s when you can claim Social Security without a reduction to your monthly benefits.
The earliest age to sign up for Social Security is 62. But at full retirement age (FRA), which is 67 for those born in 1960 or later, your monthly checks are yours to collect in full.
That doesn’t mean you have to sign up at that point, though. For each year you delay Social Security past FRA, your monthly benefits rise 8%, up until age 70. So if you’re still working at 67, you may want to wait on putting in your claim.
Every year you wait boosts your monthly check
If you’re still working and collecting your regular paycheck, it means you can probably cover your living expenses without Social Security. And in that case, waiting to file for benefits could work to your advantage.
Social Security is a retirement income source that can’t run out. You could end up depleting your savings, for example, if the market performs poorly or you’re holding the wrong investments for your situation. But Social Security is guaranteed to pay you a monthly benefit for life. And that’s what makes delaying such a valuable move.
If you delay Social Security, not only will your monthly benefits be larger, but so will your cost-of-living adjustments. That could result in a lot more financial stability throughout retirement.
To give you an example of how waiting on Social Security might pay off, let’s say your benefit at age 67 is $2,000. If you wait until 70 to file, your benefit will jump to $2,480. That’s an extra $5,760 per year, multiplied by what could be a 20-year retirement or longer.
Delaying for even a single year can help
Of course, just because you’re still working at age 67 doesn’t mean you’d like to continue working until you’re 70. But you can still improve your financial situation by delaying Social Security for a single year if you can’t hold off three years.
In the case of a $2,000 monthly benefit, waiting one year to file brings your monthly checks up to $2,160. That’s an additional $1,920 a year, which still serves as a nice safety net.
That’s a sum that could, for example, cover a car repair, a large medical bill, or any other surprise expense that might arise. Or, itβs a sum that could pay for an extra vacation or support more hobbies if you donβt need it for basic needs or unplanned bills.
Delaying Social Security when you’re no longer working can be tricky. In that case, you may have to draw down savings to make waiting on benefits feasible, which can be a risky thing.
But if you’re still working at 67 and don’t need your Social Security benefits immediately, waiting to file could be one of the few opportunities you’ll ever have to lock in a guaranteed increase to your retirement income.
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Maurie Backman has more than a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. Her work has appeared on sites that include The Motley Fool, USA Today, U.S. News & World Report, and Kiplinger.
Prior to becoming a full-time financial writer, Maurie worked in the financial industry trading distressed debt. She then changed course and spent a few years designing electronic toys. After a stint in content marketing and UX, she shifted back into writing and has since covered everything from the housing market to estate planning to Medicare.
When she's not busy writing, Maurie can be found hiking, walking her dogs, driving her kids to their various sports practices and games, and curling up with a good book. She cooks on occasion and bakes way too often.
