Why You Should Delay Your Social Security Claim

If you delay claiming your social security benefits, it will result in giving up years of income available to you. The social security checks can start as early as the age of 62 years, but if you can wait till you are 70, it can translate into increased benefits for each year you delay.

Here are four reasons which will help you strategize what is the best for you and why you should think of waiting as long as possible.

Maximize potential for higher long-time benefits

Inherently, social security is designed so that it equalizes the number of benefits retirees get, irrespective of at what age they claim it first.

Anyone who files before their full retirement age (FRA) will get reduced standard benefit owing to filing penalties. Though they will get more checks in their lifetime, each would not be as large as the ones they would get if they waited past their FRA.

However, retirees who waited past their full retirement age may get fewer checks, but the delayed retirement credits will raise the number of their checks, each of which will be of a higher sum.

The system was designed based on life expectancies when social security was set up. As life expectancy has gone up, the system of penalties on early filings and delayed retirement credits remains the same.

Some retirees live longer than their life expectancies and, as a result, get more income if they wait till they are 70 to start claiming benefits. So, if you plan to maximize your monthly income, the best choice is to delay.

Bring in more income each month

People’s main worry is whether their retirement savings can last a lifetime. So, it makes sense to delay getting the biggest social security check you can. As social security checks more often than not last for a lifetime, you will always be able to rely on this income to be there.

However, living only on social security won’t be enough as these benefits are just 40 percent of pre-retirement income. But if you want these benefits from the bulk of your income late in life, it is a no-brainer to try and maximize it, meaning delay as long as possible to start getting checks.

Protect your spouse

If you earn more than your spouse and delay availing your benefits, it will ensure that your spouse is better provided if you happen to pass away.

In case of a partner dying, the surviving partner can claim benefits due to him/her. This equals the higher benefits either person was getting.

If one partner claims benefits early, that will shrink the money social security is giving you. This would also reduce the benefits the survivor gets if you die. Even under the best circumstances, the loss of a spouse is often financially devastating. But if you leave them with a smaller benefit, things will become even worse.

Avoid losing benefits

If you desire to work while side by side receiving social security benefits, then you would have to wait till the full retirement age to claim these.

You can’t avail some benefits temporarily if you earn too much before you reach FRA.

A big paycheck can result in loss of benefits and SSA withholding entire checks.

However, the early filing penalties are credited back to you after recalculating your benefit at FRA. But breaking even for missed benefits usually takes years. So, claiming benefits early doesn’t make sense as you will not get most of the checks.