4 Reasons to Consider Delaying Social Security

As you approach retirement, one of the most important decisions you will make is when you elect to begin receiving your Social Security benefits. While collecting these benefits right away might help alleviate some of your “no-more-paycheck” worries, there is an undeniable advantage to delaying your Social Security benefits.

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The “best age” to claim Social Security differs for each person depending on your circumstances, but here are a few reasons why delaying your benefits could be a great option:

The biggest risk in retirement is longevity – ensuring you have enough income to last your lifetime. Delaying Social Security until a later date can help reduce the risk of running out of money.

If you delay receiving your Social Security benefits, your checks from the Administration will be bigger each month once you start collecting. Therefore, even if you end up exhausting any savings and investment accounts you had for retirement, you will still have a steady and larger income for the remainder of your life. For each year you delay benefits, your monthly payments will increase between 7%-8%. If you’re able to live comfortably on any of your other retirement funds for a few more years, it may be to your benefit to do so.

Your cost of living adjustments (COLA) will be higher.

CNN Money states that, “Social Security benefits increase by a percentage of the current payout to keep up with the cost of living.” So, if you delay your start date and collect a higher amount, the same percentage cost of living boost will have a greater dollar value.

You can minimize lifetime benefit regret.

In general, retirees earn a bigger lifetime benefit after age 78 by delaying Social Security, say from age 62 to age 66 instead. This means that if you live past age 78, your lifetime benefit would be much smaller if you took your benefits out early (age 62) instead of later (age 66). You can help minimize any regret you would feel at age 79 by delaying your benefits by a few years.

Life expectancy is increasing.

Advancements in medicine and wellness research are increasing our longevity. For healthy retirees, delaying Social Security benefits can be an ideal choice because you will likely live long enough to make this a more advantageous decision.

The Social Security Administration states: “There is no one ‘best age’ to start receiving retirement benefits, ultimately, it is your choice.  You should make an  informed decision about when to apply for benefits based on your individual and family circumstances.”  If you need help deciding which Social Security strategies are best for you and your spouse, give us a call.  We can help you wade through all of the pros and cons of when to elect receiving your benefits.


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