Should I delay Social Security until 70 while still working past FRA or take benefits now?
I reached my full retirement age (67) last month and now I'm wrestling with when to actually start my Social Security benefits. My original plan was to wait until 70 to maximize my monthly amount (I know it increases by 8% per year after FRA). But lately I've been wondering if this makes sense in my situation. I'm still employed full-time making about $85,000 annually, and honestly enjoy my job enough that I might keep working until 72 or 73. I know that after FRA there's no earnings test penalty, but I'm confused about the tax implications. If I start benefits now while still working, will a big chunk get eaten up in taxes? Or does that happen regardless of when I start? Also, I've been trying to calculate my break-even point - how long I'd need to live after 70 to make delaying worthwhile compared to taking it now. The SSA calculator shows I'd get about $2,950/month if I start now versus around $3,670/month if I wait until 70. Can someone help me figure out if I should just take it now or stick with my plan to wait? And please explain how the taxes work either way!
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Daryl Bright
Smart question. This is all about your personal break-even analysis and tax situation. First, regarding taxes: Social Security benefits can be taxable regardless of when you start them. With your income level ($85K plus SS benefits), up to 85% of your benefits would likely be subject to income tax whether you start at FRA or age 70. For the break-even calculation: Taking $2,950 monthly at FRA versus $3,670 at 70 means you'd collect about $106,200 during those three years. After age 70, you'd be collecting about $720 more per month with the delayed strategy. So you'd need about 148 months (12.3 years) after age 70 to break even - meaning you'd need to live until about 82.3 to make waiting financially worthwhile. The advantage of taking it now is guaranteed income and more total dollars if you don't reach that break-even age. The advantage of waiting is insurance against longevity - if you live into your 90s, you'll collect significantly more over your lifetime.
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Natalie Khan
•Thank you for explaining this so clearly! The break-even point of 82 is helpful to visualize. My parents both lived into their late 80s, so genetically I might benefit from waiting. But I'm still confused about the tax part - are you saying I'll pay the same amount of tax whether I take SS now or at 70, as long as I'm still earning that salary?
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Sienna Gomez
take it NOW!!! i waited til 68 to get mine thinking id get more but then had health problems at 73 so what was the point? bird in hand better than waiting. plus government keeps changing rules who knows what theyll do in 3 years
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Kirsuktow DarkBlade
•This is terrible advice. Every situation is different, and making a decision based on fear that "rules might change" isn't rational. The delayed retirement credits are built into law and have been consistent for decades. I waited until 70 and am glad I did - my monthly check is significantly higher, which matters more now that I'm in my 80s.
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Abigail bergen
I was in almost the exact same situation last year! Reached FRA but still working and trying to decide. I opted to take my benefits at FRA even though I'm still working. My reasoning: I'm healthy now and can enjoy the money, plus I wanted to invest some of it while the market is doing well. On taxes - yes, with your income, you'll likely have up to 85% of your SS benefits subject to taxation regardless of when you start them. If you earn more than $25k individually or $32k filing jointly, some portion gets taxed. One thing I didn't fully understand until talking with an SSA agent: the delayed retirement credits (8% per year) only apply to your PRIMARY insurance amount, not any additional benefits like spousal or survivors. Do you have a spouse who might claim on your record? That could change the equation.
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Ahooker-Equator
•Wait, I'm confused... I thought after you reach full retirement age you don't get taxed on SS benefits if you keep working? That's what my neighbor told me and he's been collecting for years. Is that wrong???
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Daryl Bright
•@user6 - Your neighbor is confusing two different things. After FRA, there's no *earnings test penalty* (where SSA withholds benefits if you earn too much). That's different from income tax. Social Security benefits can be subject to federal income tax at any age based on your combined income.
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Anderson Prospero
The real question nobody's asking: Why are you planning to work until 72 or 73? Life is short! I took my SS at 62, retired, and never looked back. Sure, I get less per month, but I've been enjoying life for years while others are still working. No amount of money can buy back time.
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Natalie Khan
•I actually enjoy my work and find it fulfilling! Plus the extra income allows me to help my grandkids with college expenses while still building my savings. Different strokes, I guess!
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Tyrone Hill
I spent 30+ years as a financial advisor, and this question comes up constantly. Here's what I tell clients: 1. The 8% per year delayed credits are a GUARANTEED return that's hard to beat elsewhere 2. If you're still working and don't need the income, waiting is usually advantageous 3. Tax consideration: Yes, at your income level ($85K plus benefits), up to 85% of your SS will be subject to income tax EITHER WAY 4. Health/longevity is crucial - family history matters 5. Consider your overall asset situation - if you have minimal savings, taking earlier might reduce stress One strategy some of my clients used: Take SS at FRA but save/invest 100% of those payments until age 70. This gives you the security of receiving benefits while potentially growing those funds, and you'll have a nice lump sum at 70 plus the higher monthly payment going forward if you decide to stop working then.
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Natalie Khan
•That strategy of taking at FRA but investing the money is intriguing! I hadn't thought of that approach. I do have about $450K in retirement accounts currently. Do you think that's enough to justify waiting, or should I consider taking benefits now?
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Tyrone Hill
•With $450K in retirement accounts, you have some flexibility. The invest-the-benefits approach can work well if you're disciplined. Just remember that investing those benefits means they're at market risk, while the 8% annual increase from delaying is guaranteed. It really comes down to: 1) your confidence in living past the break-even point, and 2) your comfort with your current financial position.
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Kirsuktow DarkBlade
I've been trying to get through to Social Security for WEEKS to ask almost this exact same question! Every time I call, I wait forever and then get disconnected. So frustrating. Has anyone found a way to actually talk to a real person at SSA without wasting an entire day???
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Abigail bergen
•Yes! I was having the same problem last month - waiting for hours only to get disconnected. I found this service called Claimyr that got me connected to an SSA agent in under 20 minutes. It was such a relief to finally get answers about my delayed retirement credits. Check out claimyr.com - they have a video showing how it works at https://youtu.be/Z-BRbJw3puU. Definitely worth it for getting actual answers from SSA instead of guessing.
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Kirsuktow DarkBlade
•That sounds incredible - thank you! Going to try this right now. I've literally spent hours on hold this week alone.
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Ahooker-Equator
my husband took ss at FRA and I waited till 70. we both still working part time. the math works different for everyone but just remember once u choose u mostly stuck with it except the first 12 months u can pay back everything and start over but thats hard for most people after spending the money! imo if u dont need money now and think ull live long time waiting makes sense
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Natalie Khan
•Good point about the 12-month window to change your mind! I hadn't considered that safety net. Although as you say, paying it all back would be challenging.
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Daryl Bright
One other important factor no one has mentioned: survivor benefits. If you're married, the higher of the two benefit amounts becomes the survivor benefit when one spouse passes away. By maximizing your benefit by waiting until 70, you're potentially securing a higher survivor benefit for your spouse if you pass away first. This is especially important if your benefit is significantly higher than your spouse's.
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Natalie Khan
•I'm actually widowed, so that consideration doesn't apply in my case. But that's valuable information for married couples reading this thread - thank you for bringing it up!
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Sienna Gomez
SSA system is completely broken anyway. Friend of mine tried to do what ur talking about, waited till 70, then the govt changed how they calculate COLA and he barely got more than if hed taken it at normal time. Just take the money now!!!!
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Tyrone Hill
•This is simply incorrect information. COLA adjustments apply to ALL beneficiaries regardless of when they started benefits. Your friend's situation must have involved other factors. The delayed retirement credits of 8% per year are guaranteed by law and have remained consistent for decades.
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Natalie Khan
Thank you all for the thoughtful responses! After considering everything, I think I'm going to wait until 70 to start my benefits since I'm still earning good income and don't need the SS money right now. The guaranteed 8% annual increase is appealing, and given my family history, I'm likely to live past the break-even point. I appreciate everyone sharing their experiences and knowledge!
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Abigail bergen
•Sounds like a well-thought-out decision! Just make sure to reassess if your circumstances change. And remember to create your my Social Security account online if you haven't already - it's helpful to periodically check your earnings record for accuracy while you're still working.
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Mateo Sanchez
•Great decision, Natalie! One additional tip: since you're planning to work until 72-73, make sure to keep track of your highest 35 years of earnings. If your current $85K salary represents some of your highest earning years, continuing to work could actually increase your benefit calculation even further by replacing lower-earning years in your benefit formula. The SSA recalculates benefits annually if you have higher earnings, so you might get an even better monthly amount than the $3,670 estimate when you do start at 70!
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Caesar Grant
•That's a solid decision, Natalie! I'm in a similar boat - reached FRA last year but decided to wait until 70. One thing that helped me feel more confident about waiting was setting up automatic transfers of what my SS benefit would have been ($2,950 in your case) into a separate savings account each month. That way I'm "paying myself" the benefit I'm delaying and building up a nice emergency cushion while I wait for the higher payments to kick in at 70. Just a thought if you want to simulate having that monthly income while still maximizing your future benefit!
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Olivia Clark
•Smart choice! I'm new to this community but have been researching the same decision myself. One thing I learned that might help others reading this thread - if you change your mind before age 70, you can still start benefits at any point without penalty. The delayed retirement credits accumulate monthly, not just annually, so if you decided to start at 69 and 6 months, you'd still get credit for that extra 2.5 years of delay. It's nice to know you have that flexibility while you're waiting. Best of luck with your decision!
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