The longer you wait to receive Social Security until your full retirement age, the larger your checks will be when you receive them. But is that worth delaying your benefits, since you can start getting them as early as age 62?
The age at which the total life benefits you receive by delaying your claim reaches what you would have accumulated from claiming before your age of separation. Some people rely heavily on this figure when determining the right time to access benefits, but there are other important factors to consider.
What does age difference mean?
The retirement age depends on when you start receiving Social Security benefits and your full retirement age. Usually in the late 70s or early 80s.
People who aren’t sure they’ll live to that age can benefit from taking Social Security as soon as they become eligible. For some, it may make sense to delay, as the money you will receive after the leave years would not be available if you started applying earlier.
The Social Security Administration has tools on its website that can help you determine the best age to claim your benefits based on your specific situation.
Life doesn’t usually follow a spreadsheet
Life doesn’t go as planned. Someone who took out Social Security at age 62, thinking they won’t make it to 80 because of health issues, may be in a worse financial position if they live longer than expected compared to if they had waited. On the other hand, if someone waits to claim Social Security until they are 70, there is no guarantee that they will live until they get divorced.
That’s why the Social Security Administration says there is no “best age” to claim benefits. Your family’s health history, your financial situation and the needs of your job are three important factors that introduce diversity.
Delaying until 70 will increase your benefits, which may outweigh the immediate gratification of receiving checks from age 62. Higher cash flow in the future provides more financial flexibility to cover various expenses. However, some people should apply early, as doing so can get them out of financial trouble and reduce stress. Claiming Social Security can help people retire from physically demanding jobs and transition to meaningful part-time work.
What should be considered instead before applying
Everyone’s situation is different, but there are common patterns and themes that can lead to the right decision for you. It is beneficial to delay Social Security if you have the necessary income and earnings to keep up with the cost of living. However, if that same paycheck requires you to work at a job that harms your health, claiming Social Security may be the right move. Consider that if you’re still working when you claim Social Security, part of your check may be temporarily withheld — depending on your earnings — until you reach full retirement age.
A large benefit in the future can reduce the risk of bankruptcy, but a delay can also increase your spouse’s survival benefit if they outlive you. The survivor benefit can be either the surviving spouse’s current benefit or the deceased spouse’s benefit, whichever is higher. That’s why higher-earning spouses tend to wait until 70 to take out Social Security, while lower-income spouses apply earlier.
