Social Security Benefits: When Waiting Doesn't Pay

Social Security's rules are complex, but often, they reward those who are able to defer taking their benefits beyond their full retirement age. But that isn't true of all Social Security benefits. With some, there's no advantage to be gained by waiting.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through two situations where waiting for benefits won't do any good. Dan explains how delayed credits generally allow you to get bigger monthly checks by waiting as long as age 70 to start taking benefits. But Dan notes that with spousal benefits, there are no delayed credits for waiting past full retirement age, so there's no reason to wait until after then. Moreover, Dan talks about how a similar rule applies to survivors' benefits after a spouse has passed away, although he notes that you shouldn't confuse this with the choice that spouse makes about when to take his or her own benefits before death. Dan concludes that you have to know the rules to make sure you don't needlessly waste months of benefits you could have received.

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Comments from our Foolish Readers

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  • Report this Comment On February 16, 2014, at 10:38 AM, kurtdabear wrote:

    I took early Social Security even knowing that it would probably cost me some dollars over the long run. There were two main reasons--one was the psychic benefit of being able to get out of a job I no longer liked several years earlier than would have otherwise been possible.

    The second is based on the old adage, "A bird in the hand is worth two in the bush." By that I mean that Social Security rules are written on shifting sands. SS is essentially a Ponzi scheme reaching maturity, which is when bad things start to happen. During the last couple of decades that I worked, they changed my "normal" retirement age, they raised the salary cap annually, they raised the tax more than once, they made SS income taxable and they reduced the benefit percentage for early retirees.

    But they never mess with the people who are already collecting because that might cost our Congress members votes.

  • Report this Comment On February 16, 2014, at 11:00 AM, LadyMantle wrote:

    In years past, the earning potential in your years before retirement was predictably the highest earnings of one's career/working years. Since the recession, many people are earning less instead of more. SS figures your retirement on the highest earning years and if you are making less before your full retirement, it may not behoove you to wait until then.

  • Report this Comment On February 16, 2014, at 11:16 AM, Riznott wrote:

    @LadyMantle: SS does figure your retirement benefit on your highest earning years, but the number of those years in the formula is 35. It is unlikely that almost anyone currently has 35 years of higher earnings. Even if they do, the formula is heavily weighted to the first (lowest) average earning amounts, so a couple of lower earning years won't make much difference.

  • Report this Comment On February 16, 2014, at 11:18 AM, merryll wrote:

    When I reached the age to draw my full ss, about 66, I signed up for benefits and continued to work to age 72 while drawing my full ss benefit. I did not have to forfeit any, but did have to pay income tax on part of it. I accumulated a nice savings account over that time. My continued work, increased my ss payments each year and I had a nice savings account when I did retire.

  • Report this Comment On February 16, 2014, at 11:48 AM, silverdragon8448 wrote:

    If you are not working or making a little money until 66 for full retirement then take it at 62. You might actually be lowing your Social Security payments. Mine estimated has gone down these past few years

  • Report this Comment On February 16, 2014, at 11:52 AM, oldman144 wrote:

    Thanks to Clinton, as soon as you reach full retirement age ( in my case 65 y,10m) you can earn as much as you like and not get dinged. At the time, as long as you did no exceed around 33k for the year during your full date you were not dinged either. Bottom line, I did not make a fortune as an IBM line worker and to wait any longer to retire made no sense.

    I'm now 71 and I cannot see circumstances where the average worker should wait any longer than he or she should ( once your reach that magic full retirement age).. My dad retired early at 62. He took 70%, but died 1 1/2 years later. Get it while you can

    I will have to live to 82 before waiting would have been profitable. Those odds for me stink.

  • Report this Comment On February 16, 2014, at 1:04 PM, ruffus wrote:

    Is it possible to retire at 58?

  • Report this Comment On February 16, 2014, at 2:26 PM, goofygranny wrote:


  • Report this Comment On February 16, 2014, at 3:35 PM, bigfoot wrote:

    @ruffus. You could retire if you are disabled. And by disabled I mean convince SS you are, not actually be disabled. My ex bro in-law has ben disabled for years and there is nothing wrong with him a job wouldn't cure.

    In reality tho from what i hear ( i might look into it) a person can start drawing from an IRA at 59 1/2. If I can take out enough at that time I could conceivably draw enough to live until 62 and then retire.

  • Report this Comment On February 16, 2014, at 5:09 PM, dodyloves wrote:

    Complex! Not! We worked for our SS, an there should not be waiting or put off is smart. Wrong. You work here in America an put in to it then you get back what you worked so hard for. If you didn't work here an put in to here, then you don't get any from here. But we all know that is not true. some came over here an some jerks in Washington DC. said they could get some ! WRONG!

  • Report this Comment On February 16, 2014, at 5:20 PM, WalterPidgeon wrote:

    Unless you know without ANY question that you will live past 78 years old, always take you SS at the earliest opportunity. Period.

  • Report this Comment On February 16, 2014, at 5:51 PM, fnurl wrote:

    Never, never defer collecting your SS. I took mine at age 62 but my best friend, a widower, said he was going to wait until he was 65. He died 2 months shy of his 65th birthday and never collected a cent. The government got it all. In the meantime I invested every penny of the SS I collected because I didn't really need it. My ROI was much higher than what I would have received if I had waited.

  • Report this Comment On February 16, 2014, at 9:53 PM, gjmc wrote:

    I agree take the money as soon as possible. Do not wait, you may not be around. I have seen several people who were just a few years and maybe a few months shy of collecting and passed away. They had worked most of their life and did not live to retire and enjoy their money. If it could be passed to another family member maybe it would be worth waiting, but it is a Ponzi scheme and the government is betting you won't live to collect. If you enjoy working then by all means wait, but if you just want to collect more, don't wait until you either won't be around or won't be well enough to care.

  • Report this Comment On February 17, 2014, at 12:20 AM, macjon55 wrote:

    If you retire before 65 which is when medicare kicks in you'll be responsible for providing your own health insurance. Unless you got plenty of money to pay for that I'd wait until 65 at least. If you are already paying your own health insurance then it's a crap shoot.

  • Report this Comment On February 17, 2014, at 9:11 AM, oldsragtop wrote:

    No male member of my father's line lived to see 60. I had my first bypass surgery at 47. When I became eligible for Social Security, of course I took it. It has been ten years, and I don't know why I didn't succumb to family history, but I sure am glad I didn't.

  • Report this Comment On February 17, 2014, at 12:27 PM, Kbkb wrote:

    Early 62 vs 66. Got it, you have to live until approx 80 before you start losing $$$ from the reduced vs full benefit (total ss benefits paid). However, no one discusses the six figure income I would be giving up those years between 62 and 66?

  • Report this Comment On February 17, 2014, at 12:36 PM, bobc513 wrote:

    Dan, I'm turning 65 soon and have gotten on the SS website to see what my monthly benefit would be now and at age 66 (full retirement). My spouse has a work history that makes using 50% of benefit a better deal than using her own. What I believe I discovered is that if she takes benefits based on mine before I turn 66 and file for retirement, the percentage is no longer 50%, but something more like 37%. So, it appears to me that they get you two ways, my benefits would be reduced (by a year), as well as, her percentage of my benefits. If this is indeed the case I will be waiting until full retirement. Can you comment on this?

  • Report this Comment On February 17, 2014, at 3:27 PM, luelue2 wrote:


    how early age can you receive Social Security ? is 60 to early?

  • Report this Comment On February 17, 2014, at 5:41 PM, maggieann wrote:

    Iam 57yr and all get from ssi is 721.00 and I have to pay rent. My doctor has me on so narcotics pain meds that Iam scared it is going to kill me. my stomach is messed up so bad from them and I have called and begged them to help me because all I get for insurance is state medicade and there is procedure that he can do and it will help me get off of all the narcotics. I take morphine,norco.xanax.and a whole list of other drugs and all I get from them is sorry can't help. what they do not realize is iam going to end up diying from them my friend is only 56 and has the same problems I have and she gets both state insurance and medicare what's up with that . I cry from the pain all day long and just want to give up please can someone help me please or I will die

  • Report this Comment On February 18, 2014, at 3:16 AM, gadfly1000 wrote:


    YOU get full benefits if you start at 66.

    Your wife gets full spouse benefits (50% of your benefits) if she starts when SHE is 66.

    Despite all the usual foolishness posted here, EVERYBODY on average gets the same total life benefit.

    You either get less for longer or more for a shorter time.

    Calculating the "break even point" is nonsense.

    1) If you can't make ends meet on a lower (earlier) pension, it doesn't matter that you get it for more years. You still can't live on it.

    2) Your survivors get less if you start your pension early. So that bad decision "keeps on [not] giving."

    3) If you die the day after you start your pension, there's no loss. You won't need it where you're going.

  • Report this Comment On March 05, 2014, at 9:33 PM, susanbk wrote:

    I am 66 yrs old going on 67.

    I signed up for SSI at age 66 and got only for 7 months and working as a full time making around

    65-70k per year. So filing taxes, my taxes went way up and i went back and stop the ssi and pay them back what i had received from them.

    I thought i might wait another year ?

    What do you think, Did i made a mistake ?

    I feel i do not have life longivity in my family.

    I love my work. Even next year, i still will be working. Any thought and comment are welcome.

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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