3 Reasons to Delay Social Security Benefits

Timing is everything. It matters when you're telling a joke, it matters when you're swinging at a baseball pitch, and it matters when you file to start collecting your Social Security benefits.

The sooner you start collecting, the smaller your checks will be, and the longer you delay, the bigger they'll be. Here's a look at three good reasons to delay starting to collect your benefits -- along with some reasons why you might instead want to start collecting early.

Image source: Getty Images.

Reason No. 1: You hope to live a long life

We may imagine enjoying long lives -- living well into our 80s or 90s. But the average American life is much shorter than that -- about 76 years for men and about 81 years for women, per 2018 data from the National Center for Health Statistics. Still, that average doesn't mean you won't make it to 97. If you're in good health, and many of your relatives have made it to 90 and beyond, you stand a good chance of doing so as well, in which case delaying starting to collect Social Security can really pay off.

That's because for every year beyond your "full retirement age" (which is 66 or 67 for most of us workers these days) that you delay starting to collect, until age 70, your benefits will grow by about 8%. Remember, though, that delaying means receiving fewer checks, so someone who starts collecting early will get smaller checks, but many more of them. The system is actually designed so that those who live average-length lives will end up collecting about the same sum over their lives no matter when they start collecting.

Reason No. 2: You're strategizing with your spouse

Another good reason to delay is if you're strategizing with your spouse. Remember that when one of you dies, your household will only be able to collect one Social Security check, not the two that you may have been used to. The survivor will get to receive whichever benefit checks were fatter, though. So one smart strategy is to delay staring to collect the benefits of whichever spouse has earned more, in order to make the bigger Social Security checks as fat as possible.

Reason No. 3: You're not ready to retire

A final good reason to delay starting to collect Social Security is if you're not quite ready to retire at 62 (the earliest age at which you can file for your benefits), 67, or any year before age 70. (There's no reason to delay beyond age 70, as the benefits won't be increased beyond that.) This reason applies to many millions of Americans, because most of us are behind in our retirement savings. Check out how much workers nearing retirement recently reported that they have saved:

Source: 2019 Retirement Confidence Survey. 

Not everyone needs to retire with a million dollars, but even $250,000 may not go nearly as far as you'd like.

Fortunately, if you have time and a job, you can probably strengthen your financial position before you retire -- possibly significantly. Here's how much you might amass if you sock away various sums regularly:

Source: Calculations by author.

Each of us is in a different situation, so consider yours and do your own math -- see whether it makes sense to delay collecting Social Security, or whether you have good reasons to start collecting early or on time.