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Reasons Not to Delay Social Security

November 13th, 2019 | 3 min. read

By Jacob Schroeder


The world is filled with generalizations.

Men are afraid of commitment. Dogs are smarter than cats (or vice versa). Most politicians are corrupt.

They wear the appearance of truth but are far from truthful. Life is much too nuanced to be condensed into general rules.

If there’s one thing everyone should learn about money is to never make financial decisions based on generalizations. Everyone’s situation is unique, which requires unique choices.

One persistent financial generalization is that everyone should delay Social Security until age 70. That’s because you can increase your benefit by up to 8% per year by waiting to file.

For about half of seniors, Social Security makes up at least 50% of their income, with one in four seniors relying on it for at least 90% of income, according to the Center on Budget and Policy Priorities. Coupled with how many people are falling short on their retirement savings, the thinking goes that a higher benefit is always a better choice.

But the size of your benefit is only one part of the equation. Other factors, including when you start receiving your benefit, how many years you anticipate collecting it, how you plan to use it and your marital status, are all equally important.

We all have different levels of wealth, different living arrangements and different health histories. That means you can find a variety of good reasons why not to delay Social Security.

You need the money now

If you find yourself out of the workforce and you need the money, then file for Social Security as soon as you are eligible. (The earliest you can claim is age 62, for a permanently reduced benefit.) End of story.

Unless, of course, you haven’t reached your full retirement age (age 66 for most) and still plan to work. Then you might want to first consider the impact works earnings can have on your benefit. Once you reach full retirement age, the earnings limit no longer applies. However, if you need the money, you may not be able to afford to wait.

You are single and suffer from a health issue

A larger benefit won’t mean anything if you have a health concern that keeps you from ever using it. As a single individual, you only have yourself to think about. And, if you expect a shorter life expectancy, it makes sense to take advantage of your benefit while you can. It may be needed to help cover medical care.

In a situation like this, you may want to work with a financial adviser to calculate a break-even analysis. This will determine the age when the amount you receive if you claim early equals the amount you would have received if you claimed later.

Your spouse is the higher earner and has a health issue

Social Security is most challenging in situations involving married couples. One such scenario is if your spouse’s earnings are higher and is in poor health.

As the higher earner, your spouse will likely have a higher Social Security benefit. Should health issues shorten your spouse’s life expectancy, you should probably claim your own benefit early. If your spouse passes away early, you will then start to receive his or her higher benefit. Therefore, it would make little sense to wait to increase your own benefit.

Your spouse is the lower earner and is older

Another scenario is if your spouse’s earnings were lower but he or she is older than you. In that case, the spousal benefit based on your record is likely the highest benefit they will receive. But your spouse cannot receive that benefit until you file for your own benefit.

Filing early will reduce your benefit, but it will unlock the benefit for your spouse. Spousal benefits don’t increase once the person reaches full retirement age. So, if your spouse is older, he or she would be missing out on benefits while waiting for you to file.

You receive a survivor’s benefit

An interesting rule about survivor benefits is that you are allowed to change from one benefit option to another, and back again. Those receiving a survivor’s benefit, therefore, may want to file early. That’s because you could take the survivor’s benefit early and then at age 70 change to your own benefit, which will have by then grown by as much as 24%.

You have a minor or disabled child at home

A minor or disabled child may qualify for their own benefit when you file. By filing early, you will trigger your own reduced benefit but at the same time a benefit payable to your child. This is another instance in which you need to be cognizant of the earnings limit should you still intend to work.

The Bottom Line

These are just examples. Your own situation could align with one of them, but other factors may dictate that you do something entirely different. Instead of taking general advice, work with a professional to properly plan ahead what Social Security claiming strategy is best for you. Social Security is too important – and can be too tricky – to simply follow in the footsteps of others. The goal is to organize all your income resources to meet your needs, not to just maximize one benefit.