Should I Delay Filing for Social Security?

Many people rush to claim Social Security benefits at age 62, but financial planning experts suggest taking time to evaluate whether delaying until age 70 might be more advantageous.

Reason 1: Larger Monthly Benefits

Claiming benefits before your full retirement age results in a permanent reduction of 25-30% compared to waiting. However, Social Security provides an 8% delayed retirement credit for each year you postpone claiming after reaching full retirement age, up until age 70. This means substantially higher monthly payments if you can afford to wait.

Reason 2: Extended Benefit Period

Life expectancy plays a crucial role in this decision. According to CDC data, Americans reaching age 65 can expect to live approximately 19 more years. If your benefit at 70 exceeds your benefit at 62 by more than 75%, you’ll have significantly more resources to cover expenses throughout your later years.

For married couples, this strategy offers additional protection. When the spouse with the greater earnings history delays filing, they leave a larger survivor benefit for their spouse, providing enhanced financial security if one partner passes away.

Reason 3: Potential Tax Advantages

Many retirees don’t realize that up to 85% of Social Security benefits may be subject to federal income taxes. However, those with modest retirement income might avoid federal taxes on benefits entirely. Baby Boomers with substantial tax-deferred retirement savings from IRAs or 401(k)s could benefit from strategic timing to minimize tax obligations.

An experienced estate planning attorney knowledgeable in retirement income planning can help determine the optimal Social Security claiming strategy for your specific circumstances. Contact our office to schedule a consultation.