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What Will My Social Security Benefit Be At Age 70

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Maximum Social Security Benefits Example

What’s the Best Age to Claim Social Security 62, 66, or 70?

Say that someone who turns 62 in 2021 will reach FRA at 66 years and 10 months, with earnings that make them eligible at that point for a monthly benefit of $1,000. Opting to receive benefits at age 62 will reduce their monthly benefit by 29.2% to $708 to account for the longer time they could receive benefits, according to the Social Security Administration. That decrease is usually permanent.

If that same individual waits to get benefits until age 70, the monthly benefit increases to $1,253. The larger amount is due to the delayed retirement credits earned for the decision to postpone receiving benefits past FRA. In this example, that higher amount at age 70 is about 77% more than the benefit they would receive each month if benefits started at age 62, or a difference of $545 each month.

A Social Security Administration calculator can give you more-personalized information. Of course, the best time for someone to start taking Social Security benefits depends on a variety of factors, not just the dollar amount of the benefit. Things such as current income and employment status, other available retirement funds, and life expectancy must also be factored into the decision.

How Much Can The Average Senior Citizen Expect To Benefit From Social Security

Ages 66-67 are magic numbers thats when many people now and later down the road will become eligible to begin receiving Social Security retirement benefits 65 was previously the full retirement age. According to the Social Security Administration, nearly nine out of 10 people ages 65 and older are currently receiving these benefits, and the number of Americans 65 and older is on the rise. By 2035, the SSA believes that the number of people ages 65 and older will increase from approximately 56 million to over 78 million.

You can expect to live just over 20 years once you turn 65, so its important to maximize your Social Security benefit. Heres advice from financial experts on how to get the most out of your Social Security benefit and how much can you expect to receive.

You Can Undo A Social Security Claiming Decision

There aren’t many times in life you can take a mulligan. But Social Security offers you the chance for a do-over. Say you claimed your benefit, but soon thereafter wish you had waited to take it. Within the first 12 months of claiming Social Security benefits, you can withdraw the application. You will need to pay back all the benefits you received, including any spousal benefits based on your record. But you can later restart your Social Security benefits at the higher amount youll earn by waiting.

Early claimers have another opportunity for a do-over: They can choose to suspend their Social Security benefit at full retirement age. Say you took your benefit at age 62. Once you turn full retirement age, you can suspend your benefit. You don’t have to pay back what you have received, and your benefit will earn delayed retirement credits of 8% a year. Wait to restart your benefit at age 70, and your monthly payment will get up to a 32% boost — which could erase much of the reduction from claiming early.

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I Won’t Need The Money To Retire Earlier

If I needed Social Security to enable me to leave the workforce, I would probably be planning to start my checks earlier. While I love my job, I don’t necessarily want to be stuck doing it until I’m 70 just because I can’t afford to quit.

But the good news is, I won’t be reliant on Social Security as a crucial income source since I am expecting my investments to provide enough to support me without it.

Since claiming my checks isn’t crucial for me to retire, I have the luxury of choosing the optimal claiming age based on a desire to maximize lifetime benefits — which, for me, means starting checks at 70.

Will My Social Security Benefits Be Reduced If I Work

Social Security

A worker who claims benefits before full retirement age may run into the earnings limit, in which Social Security temporarily withholds $1 in benefits for every $2 in earnings above a certain amount in 2021, the limit is $18,960.

And though a person may need benefits to supplement low earnings, the downside of permanently reduced benefits also exists if you claim early, whether or not you exceed the earnings limit, Ms. Floyd said.

A working widow who collects a survivor benefit could also face the earnings limit. A widow can claim a survivor benefit as young as 60, though her benefit will be reduced by claiming before full retirement age. If she is working and exceeds the earnings limit, part of those reduced benefits will be withheld.

The earnings limit also applies to the spousal benefit claimed by a nonworking spouse if the other spouse is working and both are younger than full retirement age. Social Security withholds benefits on total household earnings that exceed the limit.

Withheld benefits are not lost forever, however. At the beneficiarys full retirement age, Social Security will adjust the monthly benefit upward to account for the withheld benefits. The beneficiary will continue to receive the higher payment even after she recoups the withheld benefits, which could take 12 years.

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Can I Receive My Full Social Security Benefits At Age 70 If I Am Still Working In Canada

Can I receive my full Social Security benefits at age 70 if I am still working in Canada?

Hi. Yes, assuming that you’ve earned enough U.S. Social Security credits to qualify for benefits. Earnings in any amount wouldn’t affect your ability to collect U.S. Social Security benefits once you reach full retirement age no matter where you’re working.

However, if you’re drawing a Canadian pension based on your work in that country then your U.S. Social Security retirement benefits may be reduced due to the Windfall Elimination Provision .Our software is fully programmed to handle WEP computations, so you should strongly consider using the software to explore all of you options so that you can determine the best strategy for maximizing your benefits.

Best, Jerry

What Is Full Retirement Age

In addition to how much youve earned over the years, the size of your monthly Social Security benefit depends on when you were born and the age when you start claimingdown to the month.

Youll receive your full monthly benefit if you start claiming when you reach what Social Security considers your full retirement age , sometimes also referred to as normal retirement age. FRA was 65 when Social Security began, but it has been raised to 67 for anyone born in 1960 or later. To find your FRA, see the chart below.

Finding Your Full Retirement Age

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There Are Social Security Benefits For Surviving Spouses And Children

If your spouse dies before you, you can take a Social Security survivor benefit, but not in addition to your own benefit. You must choose one or the other. If you are at full retirement age, that benefit is worth 100% of what your spouse was receiving at the time of his or her death .

A widow or widower can start taking a survivor benefit at age 60, but the benefit will be reduced because it’s taken before full retirement age. If you remarry before age 60, you cannot get a survivor benefit. But if you remarry after age 60, you may be eligible to receive a survivor benefit based on your former spouse’s earnings record.

Eligible children who are under age 18 or were disabled before age 22 can also receive a Social Security survivor benefit, worth up to 75% of the deceased’s benefit.

Age 62 Vs Age 70 Two Scenarios

How to Easily Calculate Your Social Security Benefit for Any Age Between 62 & 70

Using the values from Social Security, I created a simple spreadsheet to compare the two scenarios.

  • Scenario I: I start at Age 62 and receive $2,060 per month.
  • Scenario II: I start at Age 70 and receive $3,646 per month.

From there, I increase the payout each year based on an assumed 3% annual inflation rate:

At first glance, folks may jump to the conclusion that Scenario I is the best option. Look at that Cumulative Column!! By taking SS early, youve earned $351k by Age 73. Delay your SS, and youre $168k behind, with only $183k in cumulative payments.

However, there comes a point in the future where the cumulative payout in theStart at 70 scenario catches up, and passes, the Start at 62.

In our case, it looks like Break-Even Point happens at Age 84:

For each year I live past Age 84, the benefit of delaying until Age 70 increases. For those of you who prefer pictures, heres the same data in graph format. The Red line is the Start At 62 scenario, the Blue is Start at 70:

Note that in the above analysis that if we delay until Age 70 well come out with ~$258k MORE Social Security by Age 95 than if we took it at Age 62. This benefit to delaying continues to grow with age.

The longer you live, the better off youll be by delaying.

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What If I Change My Mind

If you receive Social Security benefits at a reduced rate, but then change your mind, you have the option of withdrawing your application and paying back to the government what you’ve already received . Then, you could restart benefits at a later date to take advantage of a higher payout. But you are limited to one withdrawal per lifetime.

For example, let’s say you elected to receive early benefits at age 62, but then decided to go back to work at age 63. You could withdraw your Social Security application within the first 12 months of receiving benefits, pay back the years worth of benefits you received, go back to work, and then wait until a later age to restart your benefit checks at a higher level.

For important details about repaying benefits please read the SSA publication If You Change Your Mind.

Claiming Social Security At Age 66

If you were born between 1943 and 1954, your Full Retirement Age is 66. Claiming at your Full Retirement Age will entitle you to your full benefit amount, but you can still wait to claim. If you wait further, you will garner delayed retirement benefits, which will increase your monthly benefit when you do start collecting.

At Full Retirement Age you can work without any deductions from your benefit amount. However, you may still be taxed on your benefit if you have other substantial income such as wages, self-employment, interest, or dividends. If so, the Internal Revenue Service taxes your combined income which is your adjusted gross income, plus nontaxable interest, plus half of your Social Security benefits.

If you file a federal tax return as an individual and your combined income is between $25,000 and $34,000, you will have to pay income tax on up to half your benefits. If your income is more than $34,000, up to 85 percent of your benefits might be taxable.

If you are married and file a joint return, and your income together is between $32,000 and $44,000, you may have to pay income tax on up to half your benefits. If your income exceeds $44,000 you may have to pay income tax on up to 85 percent of your benefits.

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What Are Some Tips To Maximize Your Social Security Benefit

Navigating Social Security income can be complicated, but there are strategies to maximize your Social Security benefits, said Greg Middendorf, CFP, of HCM Wealth Advisors. Here is Middendorfs advice:

1. Work at least 35 years: The Social Security Administration looks at your average monthly income over your 35 highest-earning years when calculating your benefit, Middendorf said. You can still get checks even if you didnt work that long, but you might be disappointed in the amount. Those who havent worked for at least 35 years have zero-income years included in their benefit calculation, and even one of these can significantly reduce your checks.

Read: Social Security Cost-of-Living Adjustments Arent Enough to Pay Higher Costs for Seniors

2. Check your earnings record: at least once per year to make sure that everything there appears accurate, he said. Just remember the figures listed there show what youve paid Social Security taxes on, which isnt always the same as your income. In 2021, for example, you only pay Social Security taxes on the first $142,800 you earn. In prior years, this number was lower. So high earners may find their earnings record doesnt reflect their income at all, but it could still be correct.

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Can A Divorced Woman Who Was Married For More Than 10 Years Claim A Spousal Benefit On Her Ex

Social Security benefits at ages 62, 66 and 70

Not any longer. The government eliminated a strategy that allowed a spouse or a divorced spouse to use a restricted application to file for a spousal benefit while letting her own retirement benefit grow. Now only people born before 1954 can do this.

Instead, when a spouse or divorced spouse files for benefits, the government will give her all the benefits she is eligible for whether it is her retirement benefit or a spousal benefit, said William Reichenstein, a principal of Social Security Solutions, a company that helps individuals maximize their lifetime income.

A divorced spouse can file for a spousal benefit even if the ex-spouse has not yet claimed a benefit as long as both are at least 62 and are divorced for more than two years. A married spouse must wait until her spouse has filed.

But if the ex-spouse dies, the picture changes. The surviving ex-spouse can claim a survivor benefit as early as 60 and allow her retirement benefit to grow until as late as 70. Or she can claim her reduced retirement benefit early and then switch to a higher survivor benefit at full retirement age.

If you were married for 10 years, keep tabs on the ex, Ms. Floyd said. Once he dies, that survivor benefit could be higher than your own.

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How Your Social Security Benefits Are Earned

To be eligible for Social Security benefits in retirement, you must earn at least 40 “credits” throughout your career. You can earn as many as four credits a year, so it takes 10 years of work to qualify for Social Security.

In 2021, you must earn $1,470 to get one Social Security work credit and $5,880 to get the maximum four credits for the year.

You Can Claim Social Security Benefits Earned By Your Ex

Just because you’re divorced doesn’t mean you’ve lost the ability to get a Social Security benefit based on your former spouse’s earnings record. You can receive a benefit based on his or her record instead of a benefit based on your own work record if you were married at least 10 years, you are 62 or older, and single.

Like a regular spousal benefit, you can get up to 50% of an ex-spouse’s benefit — less if you claim before full retirement age. And the beauty of it is that your ex never needs to know because you apply for the benefit directly through the Social Security Administration. Taking a benefit on your ex’s record has no effect on his or her benefit or the benefit of your ex’s new spouse. And unlike a regular spousal benefit, if your ex qualifies for benefits but has yet to apply, you can still take a benefit on the ex’s record if you have been divorced for at least two years.

Note: Ex-spouses can also take a survivor benefit if their ex has died after the divorce, and, like any survivor benefit, it will be worth up to 100% of what the ex-spouse received. If you remarry after age 60, you are still eligible for the survivor benefit.

A claiming strategy if youre divorced: Exes at full retirement age who were born on January 1, 1954, or earlier can apply to restrict their application to a spousal benefit while letting their own benefit grow.

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First Is Social Security Income Taxable

Most Likely. But.it depends.

To keep it simple for the sake of this analysis, the answer is that Social Security is currently taxable if youre married and your combined income is over $32k. To determine Combined Income for Social Security taxation, you add your Adjusted Gross Income + 50% of your Social Security Income. If that amount is between $32k $44k , 50% of your social security income is taxed. If your Combined Income exceeds $44k, 85% of your Social Security income is taxed at your marginal tax rate. Heres the IRS worksheet if youd like to check if your benefits are taxable. Depending on where you live, you may also have to pay state taxes on the social security income. Read this article from Motley Fool for the details.

For the sake of this article, lets assume that 85% of Social Security is taxed at your marginal tax rate, and you live in a state with no state income tax on Social Security.

Born Before January 2 1954

Social Security Age 62, 66, 70 – Medicare Age Start – IRA Age 70 Mandatory Withdrawal (IRA RMD)

At FRA, Maria will be eligible to receive $1,200 a month based on her own record, and Tom will be eligible to receive $2,000 a month based on his record.

  • She can collect on her own record, which will pay her $1,200 a month.
  • She can collect on Tom’s record, which will pay her half of Tom’s benefits $1,000 a month.

Why might Maria consider taking the lower payment at FRA? Because that decision could pay off for her in the long run.

If she collects on Tom’s record first, Maria’s own benefits would increase to $1,584 a month at age 70. Maria has a family history of longevity, and she’s in relatively good health at age 66. So she decides to claim on Tom’s record first, then switch to her own record at 70.

Tom never needs to know that Maria is claiming based on his record, and Maria’s claim doesn’t affect his ability to claim. But if Maria remarries between 66 and 70, she won’t be able to claim on Tom’s record.

The option to claim on Tom’s record first and allow her primary insurance amount to grow is only available to Maria because she was born before January 2, 1954.

Had she been born on or after that date, at FRA she would have qualified for $1,200 a month based on her own record or $1,000 a month based on Tom’s record. If she delayed Social Security until age 70, her own benefits would increase 8% for each year she waits past her FRA. But her benefits based on Tom’s record wouldn’t grow.

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