Holding Court: Is 70 The New 65?
Holding Court is a series by retired Rye City Court Judge Joe Latwin. Latwin retired from the court in December 2022 after thirteen years of service to the City.
What topics do you want addressed by Judge Latwin? Tell us.
By Joe Latwin
If you are eligible (you worked for 40 quarters and paid Social Security taxes), you can claim Social Security Retirement Benefits at age 62. Social Security calculates your payment by looking at how much you’ve earned throughout your life. However, collecting at age 62 may not be the best choice for you.
If you claim Social Security benefits before your full retirement age (67 years old for those born in 1960 or later) your benefit payments will be reduced for each year before your full retirement age. If you retire at 62 instead of 67, your monthly payments will be reduced by 30%. You will also lose out on the full benefit of annual Cost of Living Adjustments since the percentage of increase will be a percentage of a lower number. Taking an early payment can also reduce the spousal benefit your spouse may get. If you claim before Full Retirement Age, your benefit payment will be temporarily reduced if you earn more than your earnings limit for the year – $23,400 annually. In 2025, Social Security will deduct $1 from benefit payments for every $2 in wages you earn above the annual limit.
There are good reasons to take Social Security earlier. You may be in poor health. You may have family history of early demise or shorter life expectancy, such that you will not live long enough to collect for enough time to offset the increases generated by waiting. You may need the money now and not have other funding sources, like IRAs, pension, or other investments.
On the other hand, if you delay taking Social Security past full retirement age, your benefits will increase by 8% each year up to age 70 – a total of 24% more. That increase will not only give you a higher base upon which Cost of Living Adjustments are made, but it will also give you that higher payment for as long as you live. Those increased payments will last as long as you do, even if you reach 100! Your spouse can also get the benefit of those increases if they claim spousal benefits. If you have a family history of living well into your 80s and have enough money to live for the years between 67 and 70 without Social Security, consider waiting.
You should time your first benefit payment to avoid a gap in income. Your first check won’t arrive until the month after the one you pick in your application. You can apply any time up to four months before the month you pick.
For example, if you turn 70 on March 1, you your first check will be in April. Follow this timing: Apply in November, December, January, February, or March. Pick March in the application
Get the first check in April and use the money to subscribe to MyRye.com!
