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Maximizing Your Social Security Benefits: Is Delaying Worth the Wait?

Ginnie Baker
October 15, 2023

When it comes to receiving your Social Security retirement benefit, you have options.

You can kickstart your benefits as early as age 62, but did you know that by postponing the start date, you could see your benefit check grow by around 8% for each year you delay? Here’s the lowdown:

The Basics

Full Retirement Age: For individuals born between 1943 and 1954, reaching the full Social Security benefit payment occurs at age 66*, and this is known as your full retirement age.

*Note: Full retirement age increases by two months each year after 1954 until reaching 67 for those born in 1960 or later.

Early Benefit Penalty: You can begin collecting your benefit at 62, but there’s a catch. If you opt for early benefits, your monthly payment is permanently reduced.
Bonus Payment Amounts: On the flip side, delaying benefits past your full retirement age comes with a bonus. Your Social Security benefit increases by a generous 8% for each year you wait.
The Maximum Cap Amount: By the time you hit age 70, your Social Security benefit maxes out. Waiting beyond this point won’t boost your payments any further.

Is the Delay Worth It?

Consider these scenarios to decide if delaying your Social Security benefits until age 70 makes sense for you:

Longer Life Expectancy: If you have a history of longevity in your family, delaying your benefits could be a wise move. Conversely, if your life expectancy is shorter, early benefits might be more suitable.
Financial Flexibility: If you’re still working or have other income sources, waiting for the 8% annual increase in benefits may be a more attractive option than other investment alternatives.
Survivor Benefits: If your spouse has passed away, explore the possibility of receiving survivor benefits based on their earnings. Later, you can switch to your own Social Security retirement benefits based on your earnings.
Tax Considerations: Be mindful of how your benefits are taxed. If you have additional income, your Social Security retirement benefits may be subject to income tax, especially if you haven’t reached your full retirement age yet.

In the end, whether or not you should delay receiving your Social Security benefits isn’t a one-size-fits-all decision. Take the time to evaluate your unique situation before making a choice.

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