Delaying Social Security is not an easy thing to do. It means waiting even longer to collect money you're entitled to -- and that waiting can take a lot of willpower.
But holding off could have a huge financial benefit. Each month you delay your Social Security claim past your full retirement age (FRA), your benefit grows by 2/3 of 1%. Now, a one-month delay won't give your monthly benefits that much of a lift. But if your FRA is 67 and you don't claim Social Security until your 70th birthday (when delayed retirement credits stop accruing), you'll raise your monthly benefits by 24%.
That said, delaying Social Security isn't always the best idea. If the following factors apply to you, it's probably not something you want to do.
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1. Your health is poor
Delaying your Social Security filing might boost your monthly benefits. However, it won't necessarily leave you with a higher lifetime payout.
For example, those with poor health may have shorter lifespans. And in that case, you might collect more Social Security income during your lifetime by filing for benefits at an earlier age, not a later one.
2. You've lost your job and can't find work
If you're working and collecting a paycheck, you probably don't need Social Security income to pay your expenses. But if you're laid off from work and struggling to find another job, a delayed Social Security filing could mean living off credit cards to keep up with your bills. And that's not a good thing.
Unfortunately, people who lose their jobs later in life commonly struggle to find work -- often because employers are hesitant to take a chance on older workers for fear they're on the cusp of retirement. If that's the boat you've landed in, a delayed Social Security filing may not be in the cards.
3. Your job is harming your health
Maybe you haven't lost your job, and you have the option to keep working as long as you'd like. If your job is harming your health -- whether physically, mentally, or both -- then delaying Social Security could mean getting stuck there longer. And that's not worth doing.
It's one thing to stay at a job that isn't too much of a burden so you can delay your Social Security filing and, ideally, keep growing your retirement savings. But if your job is causing you so much stress that it's become harmful to your health, or if you're physically struggling to keep working, a delayed filing just isn't worth it.
It's easy to see why holding off on claiming Social Security is something you may want to do. But if these circumstances apply to you, an earlier filing may be necessary. That could mean claiming benefits at your exact FRA or even filing earlier since you're allowed to do so starting at age 62.
