Key Points
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Claiming Social Security early can shrink the monthly checks you receive by up to 30%.
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Delaying Social Security increases your benefits until you qualify for your largest checks at 70.
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Delaying your checks often leads to a larger lifetime benefit if you have a family history of longevity.
The upside to having a family history of longevity is that you could have a long retirement — 30 or more years for some, to slow down, travel, and enjoy hobbies. The downside is you’ll also need to pay for three decades or more of living expenses, and that gets costly fast.
While personal savings are undeniably important, you want to make sure you’re doing all you can to maximize your retirement income. Claiming Social Security at the right time is an important part of that, and the data is pretty clear about when to apply if you expect a long life.
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Why delaying Social Security is your best move
Your Social Security benefit is based in part on your age at sign-up. You must claim at your full retirement age (FRA) — 67 for most people — to get the full benefit you’ve earned based on your work history.
Claiming early shrinks your checks by up to 30%, while delaying benefits increases them until you qualify for your largest checks at 70. This is worth 124% of what you’d qualify for at your FRA of 67.
If your goal is to take home the largest lifetime benefit, your life expectancy matters a lot. Those with short life expectancies may get more money overall by claiming early, but the opposite is true for those with a family history of longevity.
Delaying Social Security often results in a larger lifetime benefit for these seniors. Say you qualify for a $2,000 monthly benefit at your FRA of 67. You’d be eligible for $1,400 per month if you claim at age 62, and $2,480 per month if you claim at age 70.
Claiming at 62 buys you eight more years of checks compared to claiming at 70. But if you live until 90, you’d get $124,800 more from the program by waiting to sign up than you would by applying right away. In reality, you’d actually wind up with a bit more because larger monthly benefits would also increase your future cost-of-living adjustments (COLAs).
What to do if you can’t afford to delay Social Security until 70
While delaying Social Security until 70 might give you the largest lifetime benefit, it’s not always feasible. For example, if you’re unable to work and don’t have much in personal savings, claiming Social Security early is a better option than falling into debt.
But if you don’t want to shrink your checks by 30% due to early claiming, you have some options. You could get a job to have another income source to supplement your personal savings until you’re ready to sign up for Social Security. Or you could delay benefits for a few months or a few years, rather than waiting until 70.
Decide on a plan that works for you, but don’t be afraid to change it as you get closer to retirement. You may need to revise your plans if your health or finances change.
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