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You can claim Social Security benefits at any time between the ages of 62 and 70. Your claiming age affects the amount of money you get each month. And since your check size changes based on when you get your first payment, your choice of when to start benefits can affect your lifetime income.
It can be difficult to decide if you are better off claiming Social Security ASAP — which would mean you get more checks than those who delay, but which relegates you to getting smaller payments — or if you should delay to earn larger monthly payments, even though that means getting fewer checks over your lifetime.
But while this choice can be complicated, there are two circumstances where a delayed claim definitely won’t pay off.
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1. If you are claiming spousal benefits after full retirement age
If your spouse was a higher earner than you or if you didn’t earn enough on your own to get Social Security retirement benefits, you may decide claiming spousal benefits is the way to go. These give you Social Security income worth up to 50% of the primary earner’s standard benefit.
If you are planning on receiving spousal benefits, you can increase the amount of money you get by waiting until your own full retirement age (FRA) in order to claim them. FRA is between age 66 and four months and age 67. A claim made before then results in a benefits reduction due to starting your checks ahead of schedule.
But while Social Security retirement benefits continue increasing after FRA until the age of 70, spousal benefits do not. You cannot make your benefit bigger if you wait beyond full retirement age, so there is absolutely no reason to do so. By delaying, you’d just be missing out on income and wouldn’t get larger checks later in exchange for doing so.
2. If you pass away before you break even
Waiting beyond the age of 62 to get Social Security increases your monthly benefit. But since you are delaying your benefits claim, you are passing up all the income that could have come from the checks you opted not to receive.
The reason people do this is that they gamble on ending up with more money later once they finally start their benefits. Social Security checks increase for each month you delay them beyond the age of 62, so retirees who put off their benefits claim hope that they will get so many higher checks they cover the missed funds and then keep getting extra money on top of that.
Unfortunately, this requires you to actually live long enough for a sufficient number of big payments to come in. If you pass away too soon, you’ve given up lots of income you could’ve received with nothing to show for it. And this can leave you with a lot less money. If you delay your claim until age 70, you’d have passed up on all the income you’d have been eligible for during the past eight years. If you die at 71, you wouldn’t come close to making up for the hundreds of thousands of dollars you’d have received over the years if you hadn’t put off your benefits claim.
As these two examples show, a delayed Social Security claim isn’t always the best choice and can sometimes come at a cost. Make sure you think this through before you decide on the best age to file for benefits to begin.
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