The decision to join Social Security is not to be taken lightly. This is because your deposit age will dictate how much money you will ultimately collect each month.
If you apply for social security at your full retirement age, or FRA, you will receive exactly the monthly benefits to which your income entitles you. Filing claims before the FRA will result in a reduction, while delaying them beyond the FRA will result in a boost – and potentially generous.
In fact, if you wait until age 70 to claim Social Security, when deferred retirement credits stop accumulating, you’ll increase your benefits from 24% to 32%, depending on your FRA. And that increase will stay in effect for the rest of your life. This, in turn, could make it easier to cover these expensive retirement expenses.
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Many people retire with their mortgage already paid off. Despite this, many seniors struggle to keep up with the cost of home ownership. This is because expenses like property taxes, insurance and maintenance never go away.
Plus, as homes get older, they tend to need more repairs. These can be expensive, especially if you are no longer able to easily do them on your own. A higher monthly social security benefit could lower your housing costs. And a more robust perk could also mean the difference between being able to stay in your home and having to downsize.
2. Owning a car
If you live in an area without public transportation, you may need a personal car in retirement. But you might have to pay a lot for it.
AAA estimates that the average cost to own a vehicle is $ 805.50 per month. If you’re worried that a car will put a strain on your nest egg, then delaying your Social Security declaration to receive a higher benefit could really help in this regard.
3. Health care
It is estimated that an opposite-sex couple aged 65 on average will now spend $ 300,000 on health care throughout retirement, according to Fidelity. Reading between the lines, if you start your retirement with known health issues or start having issues as you get older, your bills could end up being even higher.
If you don’t have money earmarked for medical bills in a health savings account, it’s definitely worth considering delaying your Social Security application. A higher monthly benefit could make it easier to process your health care bills.
An increase in income could be a lifeline
Many seniors retire expecting to spend far less on living expenses than they did when they worked, only to find that their bills are largely the same. If you have the option of delaying your Social Security declaration until age 70, it might be beneficial to just sit back and wait to register. Having a higher guaranteed monthly benefit could save you a world of financial stress as a senior – and also allow you to enjoy the freedom that retirement has to offer.
The $ 16,728 Social Security bonus that most retirees completely ignore
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