Social Security benefits can help older individuals in Texas enjoy their retirement without fear of becoming destitute. However, when people claim their benefits at the wrong time, it may leave them cash-strapped. When someone reaches the full retirement age, they can receive their full monthly social security benefits; however, many aging adults will choose to delay their filing for Social Security to receive more per month.
By delaying their filing for Social Security benefits, a senior can grow their benefits by 8% a year, up until age 80. For example, if a senior is entitled to $1,500 per month in Social Security when they reach the full retirement age of 66, they will instead receive $1,860 if they wait until age 70 to file. Many aging individuals wonder if they personally should delay their benefits. While this is a personal decision, below are some common reasons why seniors delay receiving their benefits.
Most common reasons to delay pulling Social Security Benefits
- Seniors Without a Lot of Savings. Seniors should evaluate the amount of savings in their account, as well as in their IRA or 401(k) plan. Because Social Security pays a little over $18,000 per year, people often rely on their savings to supplement these benefits. Delaying Social Security payments – to grow the monthly payment – will be easier for individuals to avoid major financial difficulties if their savings are small.
- Seniors Still Collecting a Paycheck. Those older individuals still earning money from a job are often advised to delay Social Security benefits until they retire. Many seniors are unaware that their Social Security benefits are subjected to federal taxes; however, if the benefits are the person’s sole source of income, they can often be exempt from paying these taxes. But for those still working, there is a good chance this will propel them over the income limit, meaning they will need to pay taxes on their benefits. Not only will delaying benefits allow them to grow, if the senior leaves their job by the time they are ready to claim them – so the benefits are their sole source of income – they have a much better chance of not needing to pay taxes on the benefits.
- Seniors Expected to Live a Long Life. Technically, Social Security is meant to pay all seniors the same total lifetime benefits regardless of when each individual decides to file. Those who file early will receive less money each month since they will be receiving it for a longer period of time than those who file later and would like more money each month – with fewer months of benefits. For those seniors who expect to live longer – either because of their individual or family’s history of heath – it is often advisable to wait to file as long as possible, so the senior can receive more money in their lifetime.
Deciding when to file for Social Security benefits is a personal decision, and there is no right or wrong age to file. Because the decision is based on a senior’s needs and circumstances, those debating when to file for Social Security should contact a dedicated elder law attorney who can help.
Do You or a Loved One Need Assistance from an Elder Law Attorney?
If you or an aging loved one wants to learn more about the potential benefits of delaying Social Security benefits, contact the Houston estate planning attorneys at McCulloch & Miller, PLLC. We understand how stressful and complicated these situations can be, so our attorneys are knowledgeable in both estate planning and elder law matters and are here to help you tackle whatever issues you face. To schedule a consultation, call our office today at 713-333-8900.