Single retirees who never married have age based filing strategies available for claiming Social Security benefits:
- Claim reduced benefits as early as age 62, and receive a reduced monthly benefit for life.
- Wait to claim their full (100 percent) benefit until their full retirement age.
- Delay Social Security until after their full retirement age to increase their monthly benefit.
Each produces a different outcome in terms of lifetime payout.
Filing for benefits before your full retirement age, which is either age 66 or 67 depending on when you were born, results in a permanent reduction your monthly benefit.
That reduction can impact single retirees disproportionately if they do not have family or friends to act as caregivers in the event their health should fail. Indeed, single seniors who lack a support network may need to move into assisted living facilities, hire a home health aid, or seek care in a nursing home sooner than their peers, which can be costly.
The biggest opportunity to augment your guaranteed retirement income is to delay your Social Security benefits even longer. Your monthly check will increase by 8 percent simple interest per year for each year you delay benefits after your full retirement age until age 70. Following that date delayed retirement credits cease to accrue.
By delaying your filing past full retirement age, you position yourself to increase the size of your monthly Social Security check — a potential game changer.
Women may benefit most from delaying Social Security as they tend to live longer than men. Women who reach age 65 today can expect to live, on average, until age 86, according to the Social Security Administration. Remember, though, that this is merely an average. Roughly 25 percent of 65-year-olds today will live to age 90, and 10 percent will live past age 95.
Delaying retirement benefits may not be the right move for everyone. Singles who do not expect to reach the average life expectancy based on medical history or a life-threatening diagnosis, and those who have immediate financial need, may do well to claim early.
Social Security retirement benefits are one of the few inflation protected sources of retirement income that are guaranteed to last as long as you live.
Final decisions about Social Security filing strategies always rest with you and should always be based on your specific needs and health considerations. One year after the Social Security claiming decision is made the options for change are extremely limited. A Social Security representative and/or a financial advisor can help you make a more informed decision.
Note: The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
a Social Security Administration, “Benefits Planner: Life Expectancy.”
Provided by Karen Melo Ticas, a financial advisor with Baystate Financial, courtesy of Massachusetts Mutual Life Insurance Company (MassMutual).
© 2018 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001