'It's a perilous choice': I've been offered a part-time job. Do I file for Social Security at 67 or 70?

By Quentin Fottrell

'My income will be reduced to less than one-fifth of my current annual salary'

'Is there any reason I shouldn't go ahead and file?' (Photo subject is a model.)

Dear Quentin,

I plan to retire next year at age 67. I have been offered a very part-time, per diem role in my company when I retire. My income will be reduced to less than one-fifth of my current annual salary. As this reduced income will likely not increase my highest-earning-years calculation for Social Security, is there any reason I shouldn't go ahead and file?

It's a perilous choice. Or, at least, it feels that way.

Happy to Retire

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as Twitter.

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You're in a good situation: You're able to retire at 67; you'll have a part-time job to keep you busy and help you ease into retirement by providing you with some structure.

Dear Happy,

It may not be a perilous choice, but it could be an expensive one.

If you received, say, $4,000 a month from Social Security at age 67, you would have three years' worth of payments, totaling $144,000, under your belt by the time you turned 70. However, by claiming your benefits at age 70, you would get $4,960 a month, roughly 24% more, for the rest of your life, and you would break even at between age 78 to 84. (This scenario is illustrative, obviously, and not designed to be universally applicable.)

When you decide to claim depends on when you need the income, but it also hinges on how long you expect to live. Are you a smoker? Are you in good health? Have you checked your cholesterol lately? How old did your parents live to be? Do you live alone, and have you got a good social-support system? Do you exercise regularly? How's your diet? All of these questions are important to consider as you make your decision.

One thing is clear: You can absolutely keep working and collect Social Security once you reach your full retirement age. "Starting with the month you reach full retirement age, there is no limit on how much you can earn and still receive your benefits," the Social Security Administration says.

Your Social Security benefit is based on your 35 highest-earning years. For 2025, the maximum a person can earn in the year is $176,100. Social Security taxes will not be withheld above this limit. The maximum possible monthly Social Security benefit for 2025 is $5,108, for someone who waits until age 70 to claim. Someone with that same benefit who claims at 62 in 2025 would receive $2,831 a month, the SSA says.

You're in a good situation: You're able to retire at 67; you'll have a part-time job to keep you busy and help you ease into retirement by providing you with some structure; you'll be able to maintain your connections with your co-workers; and you'll enjoy a sense of purpose while you figure out what to do with the rest of your life.

Depending on your other income in retirement, your Social Security benefits may be taxable. If you take this part-time job or you have drawdowns from pretax savings or other retirement income, you may wish to consult a tax adviser. And if you delay claiming until age 70, your additional monthly benefit along with any other income might push you into a higher tax bracket. Call it a yellow flag.

Expected longevity

Your expected longevity is a key as to whether you wait or not wait to claim. You may encounter health issues as you age that could make waiting to claim Social Security less beneficial. Inflation remains one of the biggest challenges for many retired people. Given the added benefit of Social Security annual cost-of-living-adjustments (COLAs), waiting to claim your benefits may also help protect against inflation, if you live long enough.

Schroders, an investment-management company, conducted a survey earlier this year to learn about the top concerns people have about retirement. Those concerns were inflation (92%), higher-than-expected healthcare costs (86%), a major market downturn significantly affecting investments (80%), drawing down assets in a timely manner (71%) and outliving assets (70%).

In fact, 62% of respondents in that survey said they didn't know how long their money would last in retirement. Anyone reading your letter who is now 30, 40, 50 or any other age should understand that there's never a bad time to start planning ahead, paying off debts and figuring out how much money they might need in retirement. And remember, everybody's needs are different.

If you will turn 67 in 2026, that means you were born in 1959. For people born that year, the Social Security full retirement age is 66 years and 10 months. The earliest you could have claimed retirement benefits was age 62, but that would have resulted in a permanently reduced benefit. If you wait until after your full retirement age, you earn delayed retirement credits, which increase your benefit each month until age 70. These credits raise your payment by roughly 8% per year.

This changes based on year of birth. For people born in 1957, the maximum retirement benefit - claimed at age 70 - would be 128% of the full retirement benefit (what the person would have received at their full retirement age of 66 years and 6 months). Someone born in 1955 who delayed claiming Social Security until age 70 would get 130.7% of the benefit they would have received at their full retirement age of 66 years and 2 months.

The bottom line: Social Security is an insurance policy against living longer than you think you might. Of course, the best time for most people to start claiming benefits is when they stop working - that's when they need it the most. Some people recommend claiming benefits at 67 and not waiting until 70, pointing to all the things that can go wrong over the years, particularly with your health.

You'll feel better when you do the math.

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Check out the Moneyist private Facebook group, where members help answer life's thorniest money issues. Post your questions, or weigh in on the latest Moneyist columns.

Previous columns by Quentin Fottrell:

My husband, 73, is giving me a life estate in his home, yet leaving his son a $200K Porsche. Is this cause for divorce?

I have a $10K expense. Do I withdraw money from my investments or my high-yield savings account?

I'm 83 and will have $500K if I sell my house. My estranged wife wants me to join her in Colombia. Do I go?

By emailing your questions to the Moneyist or posting your dilemmas on the Moneyist Facebook group, you agree to have them published anonymously on MarketWatch.

-Quentin Fottrell

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