Why You Should Delay Your Social Security Benefit

I was concerned when I recently read that just 10% of people are committed to waiting until age 70 to start claiming their Social Security benefit. 

As I have explained many times, when you wait to claim Social Security, you are promised a bigger payout. A much bigger payout. So you can imagine my frustration when I read that only 1 in 10 people surveyed are taking advantage of this guaranteed way to boost retirement income. 

But it turns out that in the same survey, nearly 5 in 10 people said they aren’t sure when to start drawing Social Security. Aha! That’s my opening. If you are on the fence about delaying Social Security, will you hear me out on why I think you should consider this option?  

Here are some very common, logical concerns I hear about delaying… and what I want you to focus on. 

• If I wait until 70, I might die before then, or not live long enough to make it worthwhile to have waited. Yep, that’s true. But if you are near retirement and in good health, here’s what is even more likely: you will live a very long time. A 65-year-old woman today in average health (and non-smoker) has a 50% chance she will still be alive at age 88. For a man, it’s age 85. If you wait until age 70 to start Social Security, and live at least to your 88/85 life expectancy, you will collect more than if you started earlier and collected a smaller monthly benefit. Stop worrying about dying earlier. The risk you should be planning for is living a long life! Having the highest possible benefit is a valuable insurance policy if you do live a long time. 

• I don’t want to work until I am 70. No one is saying you need to. If you have other savings or income sources—401(k), IRAs, pension—it makes more sense to tap them in your 60s if it helps you delay starting Social Security. But I’d also encourage you to consider a part-time gig that would help you earn just enough to match whatever your Social Security benefit would be if you started earlier. You can log on to ssa.gov and get an estimate of your benefit at age 62 and at your Full Retirement Age (FRA). It likely will be somewhere between $1,000 and $2,000 or so, at age 62. Might you be able to find work that you enjoy that could bring in as much?  

• Social Security is going broke. I want to get my money while I can. It is not going broke. That is fearmongering. Shame on media that use that term. It is on track to have a shortfall that by 2034 or so would necessitate the program to reduce benefits by around 25%. Granted, that would be a big reduction. But that’s if Washington does nothing. And you really think Washington is going to do nothing and just cut benefits by 25% for a program that is so essential and popular? C’mon. There are plenty of rational choices Washington can make. And I would be very surprised if any choices would severely impact people close to, or in retirement. In the early 1980s when Social Security was last tweaked, it phased in changes. For example, it was back then that the full retirement age was raised from 65 to 67. But not on people who were in their 50s back then.  

In my book, The Ultimate Retirement Guide For 50+, I go into a lot more detail on why delaying Social Security can be a great strategy and offer some tips for how to navigate your 60s if you do want to delay.