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Many Americans can’t afford to retire unless they start Social Security benefits. But at the same time, many people also want to delay the start of their benefits as long as possible. Waiting can make sense because doing so increases the monthly income Social Security provides.
Unfortunately, if you’re planning to wait to file for benefits but are going to need your retirement checks to leave the workforce, there are three big reasons anticipating a delayed benefits claim may be impractical.
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1. Health issues could affect your ability to continue working
When you’re young and healthy, it’s hard to imagine that one day you may not have the physical stamina to perform your work. But the reality is this can happen to anyone, even people with a desk job.
If you develop a health issue or your energy simply starts to wane as a natural part of the aging process, you may feel like you have no choice but to quit work — and to claim Social Security if you can’t support yourself without it.
2. You may need to serve as a caregiver for loved ones
Even if you’re lucky enough to be in good health, your family obligations could prevent you from continuing to work late in life.
If your own parents are still alive, they may need your help as they enter their later years. Your spouse could also get sick and need care. Or, you may have grandchildren who you want to babysit for while their parents work.
If your caregiving responsibilities necessitate retiring, claiming Social Security could very well become necessary.
3. You may struggle to find a job as a senior
A survey of around 10,000 employers conducted for Deloitte revealed that more than 2/3 of companies saw advanced age as a competitive disadvantage, while AARP data shows age discrimination as been a problem for close to 2/3 of workers aged 45 to 65.
Unfortunately, this can make it more difficult to find a new position if you are older. If you’re unable to find work, or you lose your job later in life and don’t feel like starting over, this could necessitate an earlier-than-anticipated Social Security claim.
Don’t count on delaying your benefits
Unfortunately, all three of these scenarios are very common and most are out of your control. In other words, there’s a real chance you could find yourself having to retire early even if you hope to work well into your 60s.
The reality is, you need to plan for that to happen. And there are a few ways to do that:
You can make sure you have enough saved that you can retire and support yourself for a few years without Social Security. If you can easily live on your savings, it doesn’t matter if you end up retiring sooner than planned — you can still delay your Social Security benefits claim.
You can plan for a smaller Social Security benefit. It’s a bad idea to base your retirement goals on the assumption you’ll have a big Social Security check due to a delayed benefits claim. Instead, anticipate you’ll start checks at 62, even if you hope to wait. That way, if you’re forced to file early, you won’t be short on money.
Both scenarios require you to have more money to supplement Social Security. So, start working on setting a realistic savings goal today that reflects the reality that early retirement may be forced upon you.
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