Key Points
-
Delaying Social Security can increase the survivor benefit available to eligible family members after the worker’s death.
-
Benefits claimed after full retirement age grow by two-thirds of 1% for each month of delay, up to age 70.
-
Whether delaying makes sense depends on the worker’s financial needs, age, and family circumstances.
After decades of paying into Social Security, most workers want to maximize the benefits they receive. However, maximizing lifetime payments is not always the best choice for an entire household. If a spouse, child, or other eligible relative could qualify for survivor benefits, delaying retirement checks can be worthwhile because it increases the benefit based on the worker’s record.
Several factors should be considered before making that decision. The following explains how the age at which you begin collecting benefits affects both your retirement payments and the survivor benefits available to your family.
Image source: Getty Images.
How your claiming age affects Social Security benefits
The Social Security Administration first calculates the benefit a worker qualifies for at full retirement age, or FRA. For most workers today, that age is 67. The agency then adjusts the amount according to the age at which the worker begins collecting benefits.
Claiming at the earliest eligibility age of 62 can reduce monthly payments by as much as 30% compared with claiming at full retirement age. The reduction equals five-ninths of 1% per month for the first 36 months of early claiming, followed by five-twelfths of 1% for each additional month. Because the reduction is permanent, it can also lower the survivor benefit available to eligible family members.
Claiming after full retirement age works in the opposite direction. Benefits increase by two-thirds of 1% for each month of delay, with increases stopping at age 70. Claiming at 70 therefore produces the largest possible retirement benefit and the highest survivor benefit available on that work record.
How to decide whether to delay Social Security
Two practical considerations matter when deciding whether to postpone Social Security. First, determine whether you can comfortably cover your living expenses without the checks in the present. If delaying would cause financial hardship or unpaid bills, the larger benefit available later may not fully compensate for the immediate strain.
Your age is the second consideration. Once you reach 70, delaying further provides no additional increase. If you are already 70 or close to that age, there is little financial advantage to waiting because you have already secured the largest possible retirement and survivor benefits based on your work record.
If you are unsure which choice is best, discuss the decision with the family members who could be affected by it. Make sure everyone understands how your decision to claim—or wait—will influence the benefits available to them before you apply.
