I turn 70 in October 2021. People tell me if I file for benefits to start earlier in 2021 than October, I'll get almost the same amount. Should I do that? I'm still working so my plan would be to bank all or most of the SS benefits.

Hi,

That's up to you, but if you start drawing your benefits before you turn age 70 your permanent benefit rate would be 2/3rds of 1% lower for each month that you start drawing prior to the month you reach age 70. Furthermore, if you start drawing effective with any month other than January or the month you reach age 70, you don't receive credit for any delayed retirement credits (DRC) you earned in the calendar year that you claim your benefits until effective with the following January.

For example, say Jim turns age 70 in October 2021. Jim's primary insurance amount (PIA), which is equal to his Social Security retirement benefit rate if he'd started drawing his benefits at full retirement age (FRA), is $2000. If Jim waits to start drawing his Social Security retirement benefits until October 2021, his benefit rate would be 32% (i.e. 48 months x 2/3rds of 1%) higher than his primary insurance amount (PIA), or $2640 (i.e. $2000 x 1.32). However, Jim decides instead to start drawing his benefits effective with April 2021. Jim's initial benefit rate would then include only the DRCs he'd earned through December 2020. Thus, his benefit rate effective May 2021 would include credit for 39 DRC months (i.e. October 2017 through December 2020), making Jim's monthly benefit rate $2520 (i.e. $2000 x 1.26). Then, effective with January 2022, Jim could be credited with the 3 DRCs he earned in 2021 (i.e. for January through March), raising his benefit rate to $2560 (i.e. $2000 x 1.28). Still, that's more than 3% lower than the $2640 that Jim would have received if he had started drawing at age 70.

Furthermore, if you're married and if you die before your spouse, his or her survivor rate would be limited to no more than your monthly rate. So, if you're married and if your spouse's own Social Security benefit rate is lower than yours, you'll potentially be lowering his or her benefit rate as a survivor if you start drawing prior to age 70.

Before filing, you may want to strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully analyze your options in order to determine the best strategy for maximizing your benefits.

Best, Jerry