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3 Reasons It May Be Unrealistic to Delay Social Security

By Maurie Backman – Aug 7, 2021 at 7:02AM

Key Points

  • Delaying Social Security will leave you with higher monthly payments.
  • Your retirement plan may involve postponing your filing.
  • Certain life events could get in the way, forcing you to take benefits earlier.

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Planning to hold off on claiming benefits? You may need to rethink that.

People who near retirement without a lot of money in savings are often advised to hold off on claiming Social Security as long as possible. That way, they can snag a larger monthly benefit.

Your actual benefit is based on your wages during your 35 highest-paid years in the workforce, and you're entitled to that benefit once you reach full retirement age, or FRA. FRA is either 66, 67, or 66 and a certain number of months, depending on when you were born.

For each year you hold off on claiming Social Security past FRA, your benefits will get an 8% boost, up until the age of 70. That increase will then remain in effect on a permanent basis.

Person at laptop with serious expression

Image source: Getty Images.

Growing your benefits could make for a much more comfortable retirement. And, it can help compensate if your 401(k) or IRA balance isn't as robust as you would've hoped. But while you can plan to delay your Social Security filing, here's why that may not work out.

1. Your health could get in the way

You never know when health issues might force you to stop working before you'd like to. If you develop a condition that precludes you from holding down a job, you may need to sign up for Social Security right away to access enough money to pay your bills.

2. Somebody's else's health could deteriorate

Even if your health holds strong well into retirement, you may have a loved one whose health declines. If you need to step up and become a caregiver, it could limit your ability to work. And in the absence of a paycheck, you may need to sign up for Social Security rather than delay your filing.

The cost of paid care has risen exponentially, and putting a loved one in a nursing home or getting a home health aide may be financially out of reach. And given the way COVID-19 outbreaks exploded at senior care facilities, that's something you may not feel comfortable doing anyway.

3. You may not feel safe continuing to work

Right now, the Delta variant is causing yet another surge of COVID-19 cases, and while the vaccinated are said to have strong protection against severe illness, those with compromised immune systems have a greater risk of getting very sick. If you fall into that category, you may be reaching the point where holding down a job is just too risky. And if you need to leave that job, you may have no choice but to claim benefits so you're able to support yourself financially.

Don't count on postponing your filing

There's nothing wrong with planning to postpone your Social Security claim. But it's also important to face the reality that you may not end up in a position to do so.

If you have an opportunity to ramp up your savings, take advantage of it while you can. Sneaking even a little more money into your 401(k) or IRA could help soften the blow if you end up being unable to boost your benefits as expected.

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