Delaying Social Security benefits until age 70 can significantly increase your monthly payments through delayed retirement credits. Understanding how this decision impacts your overall estate planning strategy is crucial for maximizing both current income and future legacy protection.
What If You're Still Working?
Working past age 70 (or any time past your full retirement age, in fact) won't affect your benefits. And while you won't increase your monthly benefit by waiting past age 70 to claim, you could boost it by working in addition to collecting Social Security. This is because the SSA recalculates your benefits each December based on your 35 highest-earning years of work. If your earnings plus your Social Security benefits allow you to replace a lower-earning year, your overall benefit could increase in the annual calculation. But Social Security benefits are taxable, so if you're earning more money your tax rate may be higher.
In most cases, your Medicare premiums will be deducted from your Social Security check. If you happen to be retiring at age 70 and you've been paying Medicare's high-earner surcharges, keep in mind that you can reverse these surcharges if your income drops far enough. The Social Security Administration uses income reported two years ago to determine a beneficiary's premiums. If your income decreases significantly due to certain circumstances, including retirement, you can request that the SSA recalculate your benefits and your premium surcharges could be eliminated or reduced.
Estate Planning Considerations
When planning to claim Social Security at age 70, it's important to consider how this decision fits into your broader estate planning strategy. Higher monthly benefits can provide more financial security, but they may also affect how debts are managed and assets are distributed in your estate plan.
For additional guidance on optimizing benefits and planning strategies, review this comprehensive New York Times article on determining the optimal time to claim Social Security benefits.
For official SSA guidance, visit their Retirement Benefits page.
