Personal Finance

3 Facts About Claiming Social Security at 70


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Also, waiting until 70 to claim could further increase your Social Security income if you continue to work. Social Security calculates your benefit based on your 35 highest-earning years. Therefore each additional year you work may remove a lower-earning year from your work record, potentially increasing your benefit. Because of this fact, working from age 62 to 70, rather than claiming Social Security at 62, could conceivably remove eight low-income years from this calculation.

Social Security survivor benefits, which may be paid to your spouse and children under age 18 after you die, are determined by your personal benefit amount, so consider the implications before determining when you'll claim.

Overall, because the full retirement age increases to age 67 depending on your birth month and birth year, the percentage of income received above and below your full retirement age may differ from these figures. Regardless, claiming Social Security at age 70 will result in more Social Security income per month than claiming when you're younger.

No. 2: Medicare Impact

If you claim Social Security early, you'll be automatically enrolled in Medicare when you're nearly 65. However, if you choose to delay claiming Social Security until age 70, then you'll need to remember to file for Medicare yourself.

If that's the case, plan on signing up for Medicare three months before reaching age 65. If you don't, then you may end up paying a late-enrollment penalty for as long as you have coverage. Your monthly premium for Part B Medicare could be 10% higher for each full 12-month period that you could have had Part B but didn't enroll.

Additionally, Medicare premiums are typically withdrawn directly from Social Security checks. So, if you decide to delay receiving Social Security until 70, then you'll receive a monthly bill for those premiums. The premium for Medicare Part B, the form of Medicare that pays for non-hospital care, such as doctor visits, is $121.80 in 2016. So, plan ahead for that expense.

No. 3: Tax considerations

Depending on your situation, when you claim Social Security could have an impact on your tax bill. If you claim Social Security prior to reaching full retirement age and you continue to work, then you may pay more in taxes than you might otherwise.

No one pays the IRS taxes on more than 85% of their Social Security income, but if your combined income (adjusted gross income + nontaxable interest + one half of your Social Security benefit) is above certain levels, you will have to pay taxes on some of your benefit.

If you're single and your combined income is between $25,000 and $34,000, you may have to pay taxes on up to half of your Social Security benefit. If you earn more than $34,000 in combined income, then you could be taxed on 85% of your benefit.

If you're married with a combined income that's between $32,000 and $44,000, then you could pay taxes on up to half your benefit. Couples earning more than $44,000 in combined income could end up being taxed on up to 85% of their Social Security income.


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Since earned income can push you above these Social Security tax thresholds, you may determine that there are tax advantages associated with delaying when you claim Social Security until you stop working altogether.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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