When a senior reaches full retirement age, they can elect to receive monthly Social Security benefits. However, for many reasons, individuals often elect to delay filing for Social Security, either to increase the monthly benefits they will later receive or to continue working and avoid paying taxes on these benefits. Because filing for Social Security and delaying the benefits is a personal decision, and can have broad implications on a Colorado estate plan, below are some common questions aging individuals have about the Social Security process and if they should delay their filing.
What is the Full Retirement Age for Social Security Benefits?
The full retirement age – where seniors are entitled to start receiving their full monthly benefit – depends on an individual’s year of birth. For those born between 1943 to 1954, the full retirement age is 66 years old. For individuals born between 1955 to 1959, the full retirement age is between 66 years and 2 months to 66 years and 10 months (increasing by two months each year). For everyone born in 1960 or later, the full retirement age is 67 years old. It is also important to note that people can file for Social Security benefits as early as 62; however, they are not eligible to receive their entire monthly stipend until they reach the full retirement age.
Am I Eligible to Delay My Social Security Benefits, and What Will Delaying Them Do?
It is a common misconception that seniors must file for Social Security benefits once they reach full retirement age. Rather, seniors have the option to delay their filing, which means they are electing to not receive benefits until a later age, with the knowledge that their benefits will then be more per month. Delaying can grow a person’s benefits up to 8% per year until the age of 70. For instance, if a senior is entitled to $1,500 per month at the full retirement age of 67, they can increase their monthly benefits by $360 if they wait until age 70 to file.
Why Do People Choose to Delay Their Benefits?
Because seniors often rely on Social Security benefits to meet their daily needs after retirement, many wonder why others decide to delay. This is an extremely personal decision, but people often decide to delay when they are still collecting a paycheck or expect to live a long life. When Social Security is a person’s only form of income, they do not need to pay taxes on the amount; however, when a senior is receiving a paycheck from another source, this will often put them over the income limit and require them to pay taxes on their Social Security. Thus, many individuals still working at the full retirement age will delay filing for Social Security until the benefits would be their sole source of income – thus allowing them to avoid paying taxes.
Deciding when to file for Social Security benefits depends on each person’s situation and needs; because of this, those worried about whether they are filing at the correct time should contact an attorney experienced in both estate planning and elder law matters to help.
Are You or an Aging Loved One Interested in Learning More about Social Security Benefits?
If you or an aging loved one wants to learn more about whether delaying Social Security filing is right for you or them, contact the Colorado estate planning attorneys at Braverman Law Group. Our experienced attorneys have decades of experience handling all varieties of estate planning and elder law issues, and we can evaluate your situation with care and ease. To discuss your situation with an attorney today, call our office at 303-800-1588.