Demystifying the "Bonus" at Age 70
The idea of a "bonus" at age 70 is a popular misconception. The reality is more powerful and long-lasting: by delaying your application for Social Security retirement benefits past your Full Retirement Age (FRA), you earn Delayed Retirement Credits (DRCs). These credits permanently increase your monthly benefit amount. The maximum increase is achieved by waiting until age 70, at which point your monthly benefit can be significantly higher than if you had claimed earlier.
While there is no single bonus check, this strategy provides a lifelong increase in your income stream. The Social Security Administration (SSA) will automatically apply these credits to your benefit calculation, but you must still file an application to begin receiving payments.
The Three Ways to Apply for Your Benefits
There are three main methods for applying for your maximum Social Security benefits. Each option has its own advantages, allowing you to choose the one that best suits your comfort level and circumstances.
1. The Online Application: Easiest and Most Convenient
The Social Security Administration's website offers a streamlined online application process that many find the simplest method. You can complete the application from home, at any time of day. The website guides you step-by-step through the required information.
To begin your application online, visit the official Social Security website. It’s the most straightforward path for most people, and the SSA strongly encourages its use. Remember to gather all necessary documents and information before you start.
2. The Telephone Application: With a Helpful Representative
If you prefer to speak with a person or have questions during the application process, applying by phone is a great alternative. A representative from the SSA can walk you through the process and help you address any specific concerns. The national toll-free number is available Monday through Friday.
3. The In-Person Application: Traditional and Personal
For those who prefer a face-to-face interaction, you can visit a local Social Security office. This is particularly useful if your case has complexities or you need help with documentation. It is highly recommended to call ahead to schedule an appointment to minimize waiting times and ensure you see a representative.
Step-by-Step Guide to Applying at Age 70
- Gather Required Documents: Before you begin, collect all the necessary information and documents. This will make the process much smoother.
- Choose Your Application Method: Decide whether you will apply online, by phone, or in person. For most, the online option is the fastest.
- Start Your Application: You can apply up to four months before you want your benefits to begin. The SSA recommends applying a few months in advance to allow time for processing.
- Confirm Your Information: During the application, double-check all your personal details, work history, and banking information for direct deposit.
- Submit the Application: Complete and submit your application via your chosen method.
- Follow Up: If you apply online, you can track the status of your application with a 'my Social Security' account. If you apply via phone or in person, the representative will provide details on what to expect next.
What Information and Documents Do I Need?
When you apply for Social Security benefits, you should have the following on hand:
- Your Social Security number.
- Your birth certificate or other proof of age.
- Information about your citizenship or immigration status.
- Your W-2 forms or self-employment tax returns for the previous year.
- Direct deposit information (bank account and routing number).
- Marriage and divorce records (if applicable).
- Military service discharge papers (if applicable).
Having these items ready will prevent delays in processing your claim.
Timing Is Everything: When to Apply at 70
To ensure you receive your highest possible monthly payment, you want your benefits to begin the month you turn 70. You can submit your application up to four months in advance of this date. The SSA then processes your application and begins payments the following month. For example, if you turn 70 in September and want your benefits to begin then, you can apply as early as May.
Keep in mind that the SSA can pay retroactive benefits for up to six months, so if you apply after your 70th birthday, you might still receive a lump sum payment for the months you missed. However, applying on time is the simplest way to get your maximum benefits without a hitch.
Comparison: Claiming at FRA vs. Age 70
| Feature | Claiming at Full Retirement Age (FRA) | Claiming at Age 70 |
|---|---|---|
| Monthly Benefit | You receive 100% of your primary insurance amount. | You receive a permanently increased monthly benefit, up to 132% of your FRA amount. |
| Total Lifetime Income | Payments start earlier, but at a lower monthly rate. | Payments start later, but at a higher monthly rate, potentially leading to a higher total payout over a long retirement. |
| Earnings Test | The earnings test for working retirees no longer applies. | Not applicable, as the earnings test ends at FRA. |
| Delayed Retirement Credits | You receive no DRCs. | You receive the maximum DRCs, increasing your monthly payment for life. |
| Survivor Benefits | Affects the survivor benefits for a spouse, which may be lower than if you had waited. | Provides a higher base amount, resulting in higher survivor benefits for a spouse. |
How Your "my Social Security" Account Helps
Creating a 'my Social Security' account is a crucial step for anyone planning their retirement. This free online account allows you to:
- Get a Benefit Estimate: Use the calculator to see how much your monthly payment will be based on your age and claiming strategy.
- Review Your Earnings Record: Ensure your earnings history is accurate, as this is used to calculate your benefit.
- Apply Online: Use the account to submit and manage your application.
- Monitor Your Application: Track the status of your claim after you apply.
It’s a powerful tool that puts you in control of your retirement planning. For more detailed information on the online application, visit the Social Security Administration website.
Conclusion
Delaying your Social Security application until age 70 is one of the most effective strategies for maximizing your monthly retirement income. The so-called "bonus" is really the culmination of years of delayed retirement credits, which provide a permanent and substantial boost to your payment. The application process is straightforward and can be completed online, by phone, or in person. By understanding the timing and having your documents ready, you can confidently apply for and receive the maximum benefits you’ve earned throughout your career. Don't wait past age 70; apply now to secure your financial future.
