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I waited until 70 to claim my Social Security benefits. Should I take the six months of retroactive benefits SS is offering me? - finance.yahoo.com
That lump sum can sound like a really good idea to take! However, it comes at a cost. If you have a full retirement age (FRA) of 67 and delay taking your Social Security benefits until age 70, you have accrued an additional 24% in delayed retirement credits that increase your benefit. That amount is determined by multiplying your FRA amount by 124%, which can result in a substantially higher benefit.
First off, for every six months you delay taking your benefits beyond your FRA, your benefit increases by 4%. When you take the retroactive benefits, you lose that 4% increase, and the lump-sum payments are also reduced by 4%! Then come the taxes you will have to pay on the lump sum. Those two things alone have already reduced the amount you will receive, as well as the lifetime lower benefit for both you and your surviving spouse if you are married.
There is also another surprise you could face in two years. The Income Related Monthly Adjustment Amount, known as IRMAA. These are the additional Medicare Part B and Part D premiums that higher-income earners pay. For 2026, the standard Part B premium is $202.90. If your Modified Adjusted Gross Income (MAGI) exceeds $109,000 for a single person or $218,000 for a married couple filing jointly, you may pay higher premiums. Most people get caught off guard, as the premium is based on their tax return from two years prior. For example, the 2026 premiums are based on 2024 MAGI. If this happens, you will have to pay that higher premium for 12 months. If both spouses are married, they will each have to pay the increased amount.
Drew Wood has written a detailed article on this topic. Read the full article here…
This posting is presented for informational purposes only and does not represent legal or financial guidance. Any opinions or interpretations presented are either those of the original author or, in the case of articles authored by the AMAC Foundation, are the opinions of AMAC Foundation staff, originally trained and accredited by the National Social Security Association (NSSA) and certified via the AMAC Foundation. Any links included in the article are valid on the posted date; socialsecurityreport.org cannot guarantee the duration of the links’ validity. NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (https://amacfoundation.org/services/) or email us at ssadvisor@amacfoundation.org. Because we are a non-profit organization, there is no charge for these services.