Delaying Social Security? Don’t Make This Major Mistake

Social Security is a primary source of income for millions of retirees, and delaying benefits can be a smart option. The earliest you can file for Social Security is age 62. But the longer you wait to claim, the more you'll receive each month, which could amount to hundreds or even thousands of dollars. And that can go a long way in retirement.

However, it is possible to wait too long to file for benefits, which can be incredibly costly. Here's how to avoid this mistake.

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How long should you delay Social Security?

While you can file for benefits anytime after age 62, you'll only receive higher payments if you begin claiming between ages 62 and 70. Waiting until after age 70 to file won't increase your benefit amount any further. In other words, by delaying benefits past age 70, you're simply missing out on money you should receive.

For example, let's say your full retirement age is 67 years, and you'd receive $1,800 per month by claiming at that age. By waiting until age 70, you'd collect an extra 24%, giving you a total of $2,232 per month.

If you were to file at, say, age 75, you'd still only receive $2,232 per month. By not taking benefits between ages 70 and 75, you would miss out on nearly $27,000 per year in benefits, amounting to roughly $134,000 over five years.

What if you're not ready to claim?

More workers are choosing to put off retirement. In fact, around 31% of workers say they expect to retire sometime after age 65, and an additional 19% say they don't plan to retire at all, according to a 2022 survey from the Transamerica Center for Retirement Studies.

If you plan to continue working past age 70, you may not be ready to take Social Security just yet. However, regardless of when you retire (if you choose to retire at all), it's wise to start taking benefits at age 70 anyway.

You don't have to retire when you begin taking Social Security, and it's possible to work while receiving benefits. Also, once you reach your full retirement age, your income will not affect your benefit amount.

When delaying benefits could be risky

Delaying Social Security past age 62 will result in larger monthly checks, but it's not the right move for everyone. In some cases, you're better off claiming sooner rather than later. While it isn't the most pleasant topic, your life expectancy can impact your decision on when to take Social Security.

You should receive roughly the same amount from Social Security over a lifetime, regardless of when you file. If you claim early, you'll receive smaller checks but more of them in total. Delay benefits, and you'll collect fewer checks, but each will be larger.

These calculations assume you'll live an average lifespan, around your late 70s or early 80s. If you expect to live longer, you could collect more over a lifetime by delaying benefits. But if you think you may live a shorter-than-average lifespan, you may be better off claiming early.

The best age to take Social Security will depend on your unique situation, but waiting beyond age 70 can be costly. With the right strategy, you can maximize your benefits and enjoy a more comfortable retirement.

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