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Here's When It Pays to Delay Social Security Even When Your Health Is Poor

By Maurie Backman - Jul 16, 2020 at 6:46AM

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Poor health should usually prompt you to file for benefits early or on time. But in this case, filing late actually makes sense.

Your Social Security benefits are calculated based on the wages you earn during your 35 highest-paid years on the job. You're entitled to your full monthly benefit based on that calculation once you reach full retirement age (FRA). Here's what that age looks like, depending on your year of birth:

Year of Birth

Full Retirement Age

1943-1954

66

1955

66 and 2 months

1956

66 and 4 months

1957

66 and 6 months

1958

66 and 8 months

1959

66 and 10 months

1960 or later

67

Data source: Social Security Administration.

However, you're not required to claim benefits at FRA. You can file for Social Security starting at 62, or you can delay benefits past FRA and boost them by 8% a year in the process, up until you turn 70.

Whether it pays to file early, late, or on time, however, largely hinges on the state of your health. Social Security is technically designed to pay you the same total lifetime benefit regardless of when you initially start collecting. The logic is that if you file early, you'll get less money each month, but you'll get more years of benefits. File late, and you'll get larger monthly payments, but fewer of them. All told, things should even out if you live an average lifespan.

Older couple sitting at kitchen table holding mugs.

Image source: Getty Images.

But what if you don't? If your health is poor, you're generally better off claiming Social Security on the early side, because that way, you're more likely to come away with a higher lifetime benefit, despite a lower monthly benefit. But while that strategy certainly makes sense if you're single, if you're married and have a spouse to worry about, then it could actually pay to delay your benefits as long as possible -- even if you're unlikely to live a longer life yourself.

Take care of your spouse

The amount of money you collect from Social Security each month will impact your spouse's finances once you pass. That's because spouses are entitled to survivors benefits from Social Security. Specifically, once you pass, your spouse will be eligible to collect 100% of the monthly benefit you collected while you were alive. The higher that benefit is, the better off financially your spouse is apt to be.

Imagine you're entitled to a monthly benefit of $1,500 at an FRA of 67 (that's roughly what the average senior on Social Security collects each month). If you file at 62, you'll shrink that benefit to $1,050 a month. On the other hand, if you wait until 70 to file, you'll grow that benefit to $1,860 a month. If you wind up passing away at age 72, you'll lose out on lifetime benefits for yourself by waiting until 70 to sign up for Social Security.

But imagine you pass away at 72 and leave behind a younger spouse who winds up living well into his or her 90s. At that point, you may be cutting your own lifetime benefit short, but you'll also leave your spouse with a more robust income stream.

And that's why it could make sense to delay your Social Security filing despite poor health. While you may lose out on some income that you'd get to enjoy while still alive, you'll be doing your spouse a supreme act of kindness by setting him or her up with a higher monthly income for life.

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