There’s no official retirement age in the U.S., and there’s also no such thing as a single age at which to claim Social Security. Because of this, you may decide to push yourself to work until age 70 and sign up for Social Security at that point.
Doing so could result in a very generous monthly benefit. And that holds true whether you’re in line for Social Security’s maximum monthly benefit or not.
You might enjoy a really nice payday
You’re entitled to your complete monthly Social Security benefit, based on your personal income history, when full retirement age (FRA) arrives. That age is either 66, 67, or somewhere in between, depending on your birth year.
But for each year you delay your Social Security filing beyond FRA, your monthly benefit will grow by 8%. And in case it’s not clear, that boost is a permanent one for you to enjoy.
Meanwhile, if you’re filing for Social Security this year at age 70, the maximum monthly benefit you can collect is $4,873. However, to receive $4,873 a month from Social Security, you must be someone who worked for 35 years and earned a very high wage during that time. And “very high” means a wage that has met or exceeded the Social Security wage cap for 35 years.
Social Security is largely funded by payroll taxes. But workers don’t pay taxes on all of their income. Rather, a wage cap is established every year, which is the earnings amount on which workers will pay those taxes.
This year, that cap sits at $168,600. Last year, it was $160,200. Since the wage cap has risen with inflation through the years, there may have been some years when you earned a lot less than $160,200 or $168,600 and are still in line for Social Security’s maximum monthly benefit this year.
The point, however, is that to qualify for that benefit, your earnings had to be really high throughout your career. If that wasn’t the case, you may not be looking at a monthly paycheck of $4,873, despite having delayed your Social Security filing until 70.
That said, you might still be in line for a pretty nice monthly benefit. Even a monthly payday of $3,873 or $3,000, for that matter, could do a world of good for your retirement finances.
Delaying your filing could pay off
If you’re nearing FRA and considering claiming Social Security, it could pay to work a bit longer and delay your filing until your 70th birthday. This could be an especially wise move if you’re not feeling super confident in the amount of money you have saved for retirement and know you’ll need Social Security to cover the bulk of your senior living expenses.
In addition to delaying your Social Security filing until age 70, you can boost your monthly benefit by trying to increase your wages at the tail end of your career, whether by fighting for a promotion and raise at work or adding to your total income with a side hustle.
Either way, there’s much to be gained by claiming Social Security at 70. And this holds true even if you aren’t in line for the program’s maximum monthly payout.
