Delaying Social Security
You can apply for Social Security at any point between the ages of 62 and 70. While you might want to start immediately, it may be a better strategy to wait. Delaying your benefits may be a good idea because your benefit is permanently reduced when you claim before your full retirement age. Keep in mind there are additional advantages and drawbacks to delaying Social Security benefits.
- Written by Lindsey Crossmier
Lindsey Crossmier is an accomplished writer with experience working for The Florida Review and Bookstar PR. As a financial writer, she covers Medicare, life insurance and dental insurance topics for RetireGuide. Research-based data drives her work.Read More
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- Financially Reviewed ByToby Walters, CFA®
Toby Walters, CFA®
Chartered Financial Analyst and Paraplanner
Toby Walters, CFA®, has over 25 years of financial research experience. With a knowledge and understanding of researching and analyzing financial data, he has developed a unique and experienced viewpoint on money matters. He has been a chartered financial analyst since 2003, and most recently a portfolio analyst and paraplanner.Read More
- Published: May 4, 2023
- Updated: June 6, 2023
- 7 min read time
- This page features 5 Cited Research Articles
- Edited By
- You can start receiving your Social Security benefits any time between the ages of 62 and 70. However, the longer you delay, the larger your monthly benefit will be.
- Since you’re locked into the rate at which you first start receiving Social Security, it can be to your advantage to delay starting your benefit.
- Delaying the start of your benefit can also help protect you against inflation and may offer you an advantage when it comes to taxes.
- Talking to a financial advisor can help you understand your plan for Social Security based on your specific needs and situation.
Every retirement plan is unique. Your needs and strategies may vary, and your circumstances might require you to apply for Social Security early. But it’s important to note that there are advantages and disadvantages when it comes to taking out or delaying your Social Security benefits. Understanding these factors can help you make an informed decision about when to initiate your Social Security benefits.
Pros of Delaying Social Security
The main advantage of delaying your Social Security benefit is to make it larger. Although you can claim as early as the age of 62, your benefit will be reduced by as much as 30% if you claim before your full retirement age (somewhere between 66 and 67 for most people). Essentially, the earlier you claim your monthly benefit, the smaller it will be. You will also be locked into that rate going forward. However, your benefit increases by a small percentage for every month you delay taking your benefit past your full retirement age up to age 70.
According to Social Security Administration (SSA), in 2023, the maximum benefit for workers with steady earnings is $2,572 for a 62-year-old recipient, but $4,555 for a 70-year-old. That’s a substantial difference that can greatly impact your retirement finances.
Taxes are another reason to delay your Social Security. You may have to pay taxes on your Social Security benefits if you have additional income, such as any employment earnings or dividends. If you file as an individual and your combined income is between $25,000-$34,000, you may pay income tax on 50% of your benefit. Should your combined earnings be over $34,000, that percentage jumps to 85%. Since many people are still working at 62, it can be easy to cross over that line.
In addition, delaying Social Security can help protect against inflation. For every year you delay starting your benefit after your full retirement age, your benefit is given a delayed retirement credit of 8%. Coupled with the regular cost of living adjustments (COLA), that increase can keep your benefit from being nibbled away by inflation. In addition, the percentage increase in your benefits can give you more purchasing power.
Delaying Social Security can also increase spousal benefits. Spouses may be eligible for a benefit based on their spouse’s earnings, for up to half of the amount the worker would receive at full retirement age. However, if you claim your benefit before full retirement age, the spousal benefit is also reduced.
Cons of Delaying Social Security
The biggest drawback to delaying your social security is life expectancy. Not knowing how long you have to enjoy your retirement can make delaying your Social Security a gamble. The average life expectancy for Americans is 76.4 years, but there’s a difference between genders. For women, life expectancy is 79.3 years — for men, it’s 73.5 years. You pay into Social Security your whole working life; you deserve to reap the benefits in your retirement.
Delaying Social Security can affect your financial stability and chances. Social Security is not designed to be your , but it should supplement your lifestyle. Delaying that extra income might mean you miss an investment opportunity, which could lead to more restrictive choices down the road.
Recently there has been some concern that Social Security policies and funding are not sufficient for future needs. Although both Social Security and Medicare are fully funded through 2034, according to a 2023 report by the SSA Trustees, Social Security benefits could be reduced to 77% after 2033 if Congress does not enact further funding. Retirement can last a long time; you don’t want to see your benefit decreased when you need it most.
How To Delay Social Security
You must complete an application through the SSA to start receiving Social Security, so delaying is easy: simply don’t apply until you want to begin receiving it. You can apply up to four months before the month you want your benefits to start.
Your decision to delay or apply for Social Security should be part of your overall retirement planning strategy. The SSA has a quick calculator that shows you how much you’ll receive at different ages. This can help you decide your optimal timing for enacting your benefit (note: this is an estimate, not your actual benefit). Once you know when you want to start receiving your monthly benefit, remember to apply four months before the month you want to begin receiving your benefit to give time for processing the application.
- Understand Your Retirement Income
- Know how and where you plan to fit your benefit into your retirement income. If you decide to delay the onset of your benefit, it’s wise to have a plan to fill the income gap. This could mean leaning more heavily on your savings until your benefit begins. Or, it could mean continuing to work longer and helping your savings grow. Another alternative could be purchasing an annuity ahead of time for a continuous stream of income.
- Factor in Your 401(k) or IRA
- If you have tax-deferred savings in a 401 (k) or IRA, strategize your withdrawals. You can either withdraw from them at a measured pace or convert them into Roth IRAs for future distributions to bridge the gap before you begin taking your Social Security benefit.
- Maximize Spousal Benefits
- Couples should plan their Social Security strategies together. Depending on your circumstances, your spouse might also be eligible to receive a monthly benefit on your account. If your spouse qualifies for benefits of their own accord, the SSA will pay that amount first. But if the benefit from your account is higher, your spouse will also receive an additional amount on your record, to equal the higher total.
- Be Aware of Survivor's Benefits
- Be aware that there are also survivor’s benefits available to children and widowed spouses. If you were married for ten years, you are entitled to receive benefits on your spouse’s account whether you are still married, widowed or divorced. You’re not allowed to have remarried afterward, but there are some exceptions.
Deciding when to start your Social Security is a significant step in your overall retirement financial plan. Don’t hesitate to discuss all the options with a trusted financial professional who can advise you on the best choice for your personal circumstances.
Frequently Asked Questions About Delaying Social Security Benefits
Editor Malori Malone contributed to this article.
5 Cited Research Articles
- Centers for Disease Control and Prevention. (2023, February 7). Life Expectancy. Retrieved from https://www.cdc.gov/nchs/fastats/life-expectancy.htm
- Social Security Administration. (2023). Income Taxes And Your Social Security Benefit. Retrieved from https://www.ssa.gov/benefits/retirement/planner/taxes.html
- Social Security Administration. (2023). Early or Late Retirement? Retrieved from https://www.ssa.gov/OACT/quickcalc/early_late.html
- Paul, T. (2022, October 13). Will Social Security run out of money? Here’s what could happen to your benefits if Congress doesn’t act. Retrieved from https://www.cnbc.com/select/will-social-security-run-out-heres-what-you-need-to-know/
- Social Security Administration. (n.d.). Fact Sheet. Retrieved from https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf