Everyone Says Wait to Claim Social Security. Here’s When You Shouldn’t.

Quick Read

• Waiting until 70 to claim Social Security maximizes lifetime income for roughly 90% of retirees, with the median household losing $182,370 by claiming earlier.

• Single retirees in poor health unlikely to reach their 80s should claim early, since delaying risks collecting little or no benefits before death.

• Spousal benefit claimants earn no delayed retirement credits past full retirement age, making early claims pointless and potentially costly to delay.

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If you’ve ever read any advice about claiming Social Security, you have probably heard that you are supposed to wait to claim your benefits. In fact, there have been multiple research studies showing that a claim at age 70 maximizes your chances of getting the most lifetime income and is the right choice for around 90% of retirees.

But 90% is not 100%. There are some circumstances when you should not wait to claim Social Security. Here are a few of them.

Why is waiting to claim Social Security usually the right choice?

First, it’s worth taking a quick look at why waiting to claim Social Security is usually the right choice. The reason is a simple one: People are living longer.

When Social Security was created, a system of early filing penalties and delayed retirement credits was put into place that was supposed to result in seniors getting around the same amount of benefits no matter what age they claimed Social Security. Someone who claimed at 62 would get more checks, but each would be smaller, and someone who claimed at 70 would get bigger checks but would not get as many.

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This system is still in place, but now people live longer than they did when it was created. As a result, more people live long enough that if they delay a Social Security claim until 70, they will do better than break even for the benefits they passed up by not claiming as soon as they became eligible.

Most will end up with a lot more benefits, as the National Bureau of Economic Research found that by not waiting to claim at 70, the median household was losing out on $182,370 in discretionary spending.

It doesn’t make sense to wait to claim Social Security in these circumstances

So, it’s clear that waiting can pay off — but this is not always the case. There are a few specific situations when the best choice is almost always going to be claiming benefits earlier. Here’s what they are:

• If you are single and in poor health. If you don’t think that you are going to live into your 80s and beyond, a delayed claim is unlikely to pay off for you. This isn’t necessarily true for married couples, as waiting to claim retirement benefits can also increase survivor benefits if you were the higher earner. But if you don’t have a spouse who will rely on survivor benefits, waiting to claim would potentially mean collecting no Social Security benefits or only collecting for a short time if you pass away in your 60s or early 70s.

• Your claim enables a higher earner to wait for benefits. Married couples deal with a lot more complexity when it comes to Social Security. If you are married and you have a higher-earning spouse, it may make sense for you to claim your own retirement benefits early if doing so allows your spouse to wait longer to start their own benefits. That would maximize survivor benefits. You could also potentially switch to spousal benefits once your spouse eventually does claim their own retirement checks, so it wouldn’t matter if you shrunk your own benefit.

• You are claiming spousal benefits. Finally, if you are planning to claim spousal benefits and not your own retirement benefits, then you should start your benefits at your full retirement age.  You do not earn delayed retirement credits on spousal benefits, so there’s no advantage to delaying your claim beyond your FRA.

A financial advisor can help you to determine if waiting actually is the best move or if an earlier claim makes sense, but odds are good that if you are in any of these situations, delaying Social Security until 70 simply isn’t the right choice for you.

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