3 Reasons to Put Off Social Security for Another Year and 2 Reasons Not to

Signing up for Social Security is a pretty big deal. When you begin claiming affects how much money you get from the program, and once you’re receiving checks, it’s difficult to undo your decision.

That’s why you need to choose your claiming age carefully. Here’s a look at three reasons to put off Social Security for a while longer, as well as two reasons you may want to sign up soon.

Three reasons to put off Social Security until 2023

Here are a few reasons you may want to delay Social Security for a little longer:

1. You’ll get more money per check

If you’re under 70, delaying benefits will increase the size of your checks. Your benefit grows by anywhere from 5/12th of 1% per month to 2/3rd of 1% per month, depending on your current age and your full retirement age (FRA). This is the age at which you qualify for your standard benefit based on your work history, and it’s somewhere between 66 and 67 for today’s workers.

Delaying benefits by a single year can boost the size of your checks by 5% to 8%. For the average $1,658 monthly Social Security benefit, that’s an increase of anywhere from $83 to $133.

2. You may get a larger lifetime benefit

Delaying benefits means you’ll receive fewer checks, but since each check is larger, this usually leads to a larger lifetime benefit for those who live into their mid-80s or beyond. However, delaying Social Security might not be feasible if you need it to pay your bills.

In this case, you might have to sign up for Social Security before your FRA, even if you don’t want to. But you could try delaying benefits for a couple of months rather than signing up immediately.

3. You won’t have to worry about the Earnings Test if you’re still working

Those still working could run into problems with the Social Security Earnings Test if they claim benefits while under their FRA. This is where the government takes $1 from your Social Security checks for every $2 you earn over $19,560 in 2022 if you’ll be under your FRA for the whole year. Those who reach their FRA in 2022 only lose $1 for every $3 they earn over $51,960 if they hit this amount before their birthday.

The good news is, this money isn’t gone forever. Once you reach FRA, the government recalculates your benefit to include the amount it previously withheld, so your future checks are larger. But if you don’t need your benefits right away, you’re usually better off delaying Social Security until you retire. This will net you even more money per check.

Two reasons to claim Social Security in 2022

If either of these scenarios apply to you, you may want to sign up for Social Security this year:

1. You’re going to be 70 or older

Your Social Security checks stop growing once you turn 70, so there’s no reason to delay past this point. You’ll just cost yourself money. If you haven’t already signed up for benefits, make sure you do so by your 70th birthday at the latest.

2. You’re concerned about your health

Signing up early usually makes more sense for those with shorter life expectancies. If you try to delay benefits, you run the risk of dying before you can even sign up, meaning you might not get any money from Social Security. If your personal or family health history leads you to believe this may be a concern, think about signing up in 2022.

As you can see, when you sign up for benefits matters a lot. If you’re still unsure of when to apply, create a my Social Security account and play with its calculator. This will tell you how much you can expect from Social Security at various ages based on your actual work history data. This may give you a better idea of whether delaying benefits makes sense for you.

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