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3 Reasons to Delay Social Security Benefits

By Katie Brockman – Sep 2, 2020 at 9:00AM

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Waiting a few years to take Social Security could result in a more comfortable retirement.

Social Security benefits are an integral source of income for millions of Americans, with nearly 40% of baby boomers saying their monthly checks will be their primary income sources in retirement, according to a report from the Transamerica Center for Retirement Studies.

If you're planning on relying on Social Security for a significant chunk of your retirement income, it's crucial to ensure you're maximizing your monthly checks. And there are a few reasons why delaying benefits can help you make the most of your money.

Senior couple sitting on the couch looking at a laptop

Image source: Getty Images.

1. You'll receive bigger checks each month

You can file for benefits as early as age 62, but by waiting a few years (up to age 70) you'll receive bigger checks. Exactly how much more you'll receive will depend on your full retirement age (FRA) -- which is either age 66, 67, or somewhere in between, depending on the year you were born -- but you could boost your benefit amount by hundreds of dollars per month by waiting to claim.

For instance, say you have a FRA of 67 years old, and by claiming at that age, you'd receive $1,500 per month (the amount the average beneficiary receives, according to the Social Security Administration). If you claim early at age 62, your benefits will be reduced by 30%, leaving you with $1,050 per month. But if you'd waited until age 70 to file for benefits, you'll receive your full benefit amount plus an extra 24%, or $1,860 per month.

In other words, waiting until age 70 to claim can nearly double your benefit amount compared to what it would be if you'd claimed as early as possible. If your retirement savings aren't as strong as you'd hoped they would be, this extra money can go a long way.

2. You could receive more money over a lifetime

Social Security benefits are designed so that, theoretically, you should receive roughly the same amount over a lifetime no matter what age you begin claiming. You'll receive smaller checks each month if you claim early, but more of them over a lifetime. If you delay benefits, you'll receive bigger (but fewer) checks.

However, in real life, things don't always work out as neatly as they do on paper. These calculations assume you'll live an average lifespan, which is around 79 years according to the Centers for Disease Control and Prevention. If you end up living a longer-than-average lifespan, you could receive thousands or even tens of thousands of dollars more over a lifetime if you delay benefits.

Of course, predicting your life expectancy can be tricky, especially if you haven't even retired yet. But take an honest look at your health, and dig into your family history to see if there are any trends. If most of your family members have lived into their 90s and you're in excellent physical shape, there's a good chance you could live a long and healthy life.

3. Your spouse could receive larger checks after your passing

Most people don't particularly enjoy thinking about the end of their lives, but it's important to consider how your financial decisions can affect your surviving spouse. And if you end up passing away first, your spouse could receive bigger checks if you delay benefits.

If you pass away, your spouse can receive 100% of your benefit amount in survivors benefits (as long as your spouse has reached his or her FRA). This money can go a long way, especially if your spouse isn't collecting his or her own Social Security benefits. By waiting to claim, you can ensure your spouse receives as much as possible in the event that you pass away first.

Deciding when to begin claiming Social Security benefits is a crucial aspect of retirement planning, and it's not a decision to be taken lightly. While everyone's situation is unique and there's no one-size-fits-all answer as to when you should begin claiming, in some cases, delaying benefits could result in a more financially secure retirement.

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