There's a reason retirees tend to claim Social Security at age 62 rather than wait. That's the earliest age to receive benefits, and many people want their money as soon as they can get it.
But data shows that choosing the wrong Social Security filing age can result in a $110,000 loss of income. And perhaps the easiest way to get more Social Security is to file for benefits after reaching full retirement age (which is 67 for anyone born in 1960 or later).
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But while delaying Social Security makes sense for some people, it's not a given that it's the right choice for you. Here are a few reasons you shouldn't delay your claim despite the promise of more money each month.
1. You've lost your job
If you've lost your job before reaching full retirement age but you're at least 62, claiming Social Security is an option. It may not be an option you want to take, but it exists.
The reality is that losing a job later in life can be challenging. Older workers routinely experience age discrimination on the road to getting hired. So if you're laid off at 65, you may unfortunately end up out of work for good.
Of course, this isn't guaranteed to happen. But if you've lost your job and don't have an income, delaying Social Security may prove tricky. And holding off on benefits could mean having to take on debt in the interim. That's a dangerous thing later in life, and something you shouldn't do if you can help it -- even if it results in larger monthly Social Security checks.
2. Your health is poor
If your health isn't in the best shape, delaying Social Security poses two potential problems. First, it means you might end up with less total income from the program if you don't live a very long life. Second, it could mean missing out on some of the things you've always wanted to do.
Let's imagine you've saved enough money for retirement to cover your basic expenses, but you'll need Social Security to have funds to do things like travel. If your health is starting to decline and you put off Social Security a few more years, by the time those benefits start rolling in, you may be in a position where you're not able to take the trips you've always dreamed of. That's not fair to you.
3. You've got limited savings
Some experts will tell you that if you retire before you're ready to claim Social Security, it's better to tap your savings and let your monthly benefits grow. The logic is that you don't know what investment gains you'll lose out on by withdrawing from your nest egg. But for each year you delay Social Security past full retirement age, up until age 70, your savings are guaranteed an 8% boost.
But this strategy really only works if you have a lot of savings. If you have limited savings, and you need those savings to support yourself for a few years in the absence of Social Security, you could put yourself at risk of depleting your nest egg prematurely.
It's one thing to retire at 65 and tell yourself you'll live off of savings until age 70 if you have a $2 million nest egg to tap. With a $200,000 nest egg, that's a scarier thought.
There's definitely a financial upside to delaying Social Security. But that doesn't make a delayed claim the right choice for everyone. Think carefully before committing to your filing strategy so you don't regret your decision down the road.
