One nice thing about Social Security is that filers get a choice when it comes to signing up. Once you turn 62, you can claim Social Security at any age. However, you’re not entitled to your complete monthly benefit based on your personal income history until you arrive at full retirement age (FRA). FRA is 67 if you were born in 1960 or any time after.
Delaying your Social Security filing past FRA, meanwhile, could be a smart financial move. For each year you do so, up until age 70, your monthly benefit gets an 8% boost. If you’re someone without a lot of retirement savings, filing for Social Security at age 70 versus a younger age is a great way to make up for a lower 401(k) or IRA balance.
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Technically, there’s no such thing as a final age to sign up for Social Security. So, if you haven’t filed for benefits upon reaching the age of 70, nobody is going to force you to sign up. But that’s not necessarily a good thing.
There’s the risk of losing out on benefits
Since there’s no financial incentive to delay a Social Security claim past the age of 70, you’d think the Social Security Administration would start paying eligible seniors their monthly benefits at that point automatically. But that’s not how the system works.
If you want to collect Social Security, you have to actively sign up to receive that money. If you don’t remember to do so once you turn 70, you risk losing out on income you’re entitled to.
Social Security will pay retroactive benefits on a limited basis — up to six months’ worth. So if you don’t end up filing a benefits claim until age 70 1/2, you’re not necessarily out money because Social Security will pay you for six months of benefits dating back to your 70th birthday.
However, if you don’t end up filing for Social Security until age 71, you’ll risk permanently losing out on six months of benefits. That’s not ideal.
As such, if you’re not yet 70 and you haven’t put in a benefits claim yet, set a calendar reminder to sign up as soon as your 70th birthday arrives. You don’t want to give up any amount of retirement income you’re entitled to.
Will the rules change in time?
Even though Social Security has been around for a long time, some of its rules have changed through the years. So there’s a chance that, in time, lawmakers will make a change that involves enrolling eligible beneficiaries automatically at age 70 so they don’t lose out on income.
But for now, it’s on you to sign up for Social Security by age 70, and, ideally, not beyond. And don’t assume that being enrolled in Medicare will render you eligible for an automatic Social Security sign-up, either. Again, that’s not how the system works. You need to actively claim your monthly benefits, even if you’re at any age where you have nothing to gain by waiting.
