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If you’re in line for Social Security, your goal may be to score the largest monthly benefit you can. After all, that’s money you can use to pay bills, stay out of debt, and just plain enjoy retirement a bit more.
You may be aware that you can’t get your full monthly Social Security benefit based on your wage history until you reach full retirement age, or FRA. FRA is 67 for anyone born in 1960 or later. Furthermore, for each year you delay your Social Security filing past FRA, your benefits will grow 8%, up until age 70. (You won’t be forced to sign up at that point, but there’s no reason to delay your claim, either.)
A delayed Social Security filing might seem like the perfect thing for you at first glance. But if these scenarios apply to you, you may want to file for benefits at FRA — or even earlier.
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1. You have poor health
Poor health doesn’t always mean a shorter life expectancy. But often, it does. And if you have reason to believe you’ll live a shorter life than the typical retiree, then it generally does not pay off financially to delay your Social Security claim.
Imagine you’re entitled to $1,600 a month in Social Security at a FRA of 67. Filing at age 70 will give you $1,984 instead. So on a monthly basis, you’ll be getting more money.
But that doesn’t mean you’ll be collecting more Social Security on a lifetime basis. In this example, if you only live until age 75, you’ll end up with $34,560 less in lifetime income by delaying your filing until age 70.
2. You have a job that’s causing you to have poor health
Some people love what they do and want to work longer so they can continue doing it. But you might be in the opposite boat.
If your job is stressful, demanding, and harmful to your health, then sticking with it a few extra years could mean causing long-term damage. That’s not something you want. So in that situation, you may be better off claiming Social Security at a younger age rather than delaying your filing. A delayed filing could mean having to stick out a terrible job longer than necessary.
Look at the big picture when making your choice
Snagging a higher monthly Social Security benefit might seem ideal. But before you commit to a delayed Social Security filing, consider the downside. You don’t want to force yourself to stay at a job you can’t stand, and you definitely don’t want to short yourself on lifetime Social Security income.
Another factor to consider? Your spouse. If you’re married and your spouse is looking to claim spousal benefits through Social Security, they can’t sign up until you’ve filed. So delaying your claim in that scenario could mean not only denying your spouse some income, but also causing your marriage a world of strain at a time when you’d probably rather keep the peace.
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