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5 Reasons to Delay Social Security Benefits

By Selena Maranjian - Oct 2, 2020 at 9:31AM

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Most people start collecting their Social Security benefits early -- but there are good reasons to wait.

Social Security isn't just a series of predetermined payments that you receive starting at a particular age. You can start collecting your benefits anywhere from age 62 to 70, and there are a handful of ways that you can increase your Social Security benefits, too.

One way to beef up those benefits is by delaying when you start collecting them. Here's a look at how that works and why it might be a smart move for you.

Two Social Security cards are sitting atop hundred and twenty dollar bills.

Image source: Getty Images.

Meet your full retirement age

Each of us has a "full retirement age," based on when we were born, at which time we can start collecting the full benefits to which we're entitled. For most of us, it's between 66 and 67:

Birth Year

Full Retirement Age

1937 or earlier

65

1938

65 and 2 months

1939

65 and 4 months

1940

65 and 6 months

1941

65 and 8 months

1942

65 and 10 months

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 and later

67

Source: Social Security Administration. 

If you start collecting earlier than your full retirement age, your benefit checks will be smaller, and if you delay starting to collect beyond it, they will grow larger. The difference isn't quite as big as it seems, though, because those who start early will collect far more checks than those who start late.

Reasons to delay

Still, there are some good reasons why some people might want to delay as long as possible. (There's no point delaying beyond age 70, though, as checks won't get any bigger.) See which of these reasons apply to you:

1. You expect to live a long time. The system is designed so that those who live an average-length life will collect roughly the same total benefits no matter when they start collecting. (By the way, according to CDC data, the life expectancy for someone born in 2018 is nearly 79 years, which is a bit higher than for those born decades earlier. The average for those born in 1970, for example, is only 70.8.) So if you have a lot of relatives who have lived into, say, their 90s, it can make sense to try to delay starting to collect your benefits in order to end up with a lot of fatter checks.

2. You have no idea how long you'll live. Few of us can really have a good sense of how long we will live, though, and even if we have short-lived relatives, some of us may live long lives. Centenarians -- those 100 or older -- are one of the fastest-growing age groups. Some demographers expect there to be more than 130,000 centenarians in the U.S. by 2030, and more than 600,000 by 2060. Given this uncertainty, you may want to try to delay starting to collect Social Security -- just in case you live a very long life. After all, while living a very long life can be great, it does mean that however much money you've saved for retirement will have to support you for a longer period.

3. You can wait. Meanwhile, if you've already saved a lot of money for retirement, and you don't need Social Security income anytime soon, you might want to delay, in order to end up with bigger benefit checks. Some retirees opt to withdraw more from their IRAs and/or 401(k)s for a few years while postponing starting Social Security -- it's a strategy to consider.

4. You're still working. Those who don't have a lot socked away for retirement may be planning on working well into retirement years. If that's you, you might want to delay starting Social Security -- because if you collect benefits while working, you may be taxed on that income. Some of your Social Security benefits may even be withheld -- though withheld sums get factored back into future benefit checks, so you just get that money later.

5. You're coordinating with a spouse. Finally, if you're married, you should coordinate and come up with a Social Security strategy that makes the most sense for the two of you, given your ages, health, earnings histories, and so on. With one strategy, for example, the lower-earner might start collecting their benefits sooner, while the higher-earner delays starting to collect as long as possible, to maximize those benefits. When one partner dies, the survivor will get to collect whichever partner's benefits are larger, so it will be good to have maximized the bigger checks.

Don't just start collecting your Social Security benefits whenever. Put some thought into the matter, because when you start can make a big difference for your future finance security. Remember, too, that for some folks, starting to collect Social Security benefits early is the best move. 

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