Did you know that you can increase your Social Security benefits beyond age 70? Many are now familiar with the delayed retirement credits that individuals earn by delaying collecting their Social Security benefit until age 70. A delayed retirement credit is an 8% increase in your monthly benefit for each year you delay collecting benefits after your “normal retirement age”. Although delayed retirement credits do not continue to accrue beyond age 70, there actually is a way that you can continue to increase your benefits. While many people may not find it feasible to work beyond age 70, those who enjoy their job and continue to work could see an increase to their monthly benefits.
When Social Security calculates your benefit, they look at your lifetime earnings, and “adjust or ‘index’ your actual earnings to account for changes in average wages since the year the earnings were received. Then Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most” (Source). Therefore, every year you work beyond age 70 at a high earnings level may replace a year of lower earnings earlier in your career. In this case, Social Security will refigure your benefit and pay you any increase that is due.
Working beyond age 70 to boost your monthly Social Security retirement benefit also increases possible survivor benefits down the road. A surviving spouse is eligible to collect 100% of the benefit the deceased worker was collecting.
So, if you enjoy your job, consider working to age 70 to earn your maximum delayed retirement credits and beyond age 70 to increase your benefit even more!!
Source: Financial Planning Magazine – Why Working Past 70 Pays Off