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Social Security and You: Nothing That Special About Age 70

Tom Margenau on

I wrote a recent column in which I pointed out that waiting until 70 to start your Social Security, which is the mantra of almost everyone who is trying to "maximize" their retirement benefit, is not always the smartest move.

But still many people insist on waiting until that alleged magic age to draw their first Social Security check. Today's questions come from these folks.

Q: I have been planning to wait until 70 to start my Social Security. I will be 70 on Sept. 7, 2022. I want to make sure I get the absolute maximum Social Security benefit. I'm afraid that if I indicate September as my starting month, they will think I mean the August check that comes in September. And then because I will still be 69 in August, I will get the age 69 benefit rate instead of the age 70 rate that I've waited so long to get. Please help me.

A: If you want your benefits to start at age 70, then you will indicate September (the month you turn 70) as your starting month for Social Security benefits. It's as simple as that.

But if through some kind of fluke, they accidentally use August as your starting month -- well, it's really no big deal and nothing to lose any sleep over. In that case, you would not get the age 69 benefit rate. You would get the benefit rate payable to people who started their Social Security at age 69 and 11 months. And that would be two-thirds of 1% less than your age 70 benefit rate. So, your ongoing benefit rate would be a couple dollars less than it would have been had you started your benefits at age 70. But on the other hand, you would end up with one extra Social Security check. In other words, for probably the next dozen years or so, you'd be ahead if your benefits accidentally started at age 69 and 11 months.

Q: My wife and I are both turning 67. Everything we hear and read about Social Security tells us that we should wait until 70 to start our Social Security. But we really don't know what to do. We are so torn! We do have about $4 million in various investment funds, but we still want to make sure we get the biggest return on our Social Security investment. So, what should we do?

 

A: As I always point out in this column, I am not a financial planner. I'm just an old, retired Social Security guy. So, all I can really do is explain Social Security rules to you. And the best way I can do that is by having you read the chapter about when to take your benefits in my little Social Security guidebook called "Social Security: Simple and Smart" that you can get at Amazon and other booksellers.

But having said that, I will make this observation: If I had $4 million available to me, I wouldn't be losing sleep over my Social Security decision. It's not like you are between a rock and a hard place when it comes to Social Security. You are between a pillow and a soft place. It sounds like you are going to be just fine no matter when you choose to start your benefits.

To repeat, that advice is coming from a guy who is not a financial planner. But if you want some financial planning insight, see the answer to the next question.

Q: Half my colleagues tell me I should wait until 70 to start my benefits. The other half tell me to take benefits now. (I'm 67.) I just don't know what to do.

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