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The Case For Delaying Social Security Payments


By: Industrial Federal Credit Union

The Case for Delaying Social Security Payments

As the golden years approach, many Americans face the crucial decision of when to start receiving Social Security benefits. While the temptation to start payments as soon as possible is understandable, delaying those payments could potentially yield significant long-term benefits. Let's delve into why delaying Social Security payments may be a wise financial move for many retirees.

The main motivation behind individuals opting to collect Social Security benefits early often boils down to simply needing money. Additionally, there's a prevalent misconception linking the idea of stopping working, or retirement, with claiming Social Security benefits. This misconception sometimes prompts people to claim benefits earlier than necessary simply because they desire to stop working. However, if you have the financial means to cover your retirement expenses from savings for a couple of years, it's worth delaying your benefit application. By doing so, you can secure a higher monthly payment for the duration of your life, even if you plan to officially retire from the workforce at an earlier stage.

Understanding the Landscape

Before we dive into the intricacies of Social Security decisions, let's grasp the broader picture. According to the Economic Policy Institute, the average retirement savings for Americans in their 60s hovers around $200,000. While this might seem substantial, it's essential to remember that retirement can span decades, necessitating careful financial planning.

The Numbers Game: Percentage Comparison Differences

To illustrate the impact of delaying Social Security payments, let's consider some hypothetical scenarios:

  • Age 62: This is the earliest age at which you can start receiving Social Security benefits. By opting for early retirement, you might receive reduced monthly payments, typically around 70-75% of your full retirement benefit.

  • Full Retirement Age (FRA): FRA varies depending on your birth year, typically ranging from 66 to 67. Claiming benefits at this age ensures you receive your full retirement benefit.

  • Age 70: This marks the latest age at which you can defer Social Security payments. By delaying until age 70, you could receive up to 132% of your full retirement benefit.

Pros and Cons: Weighing Your Options

Pros of Delaying Social Security Payments:

  1. Increased Monthly Benefits: Waiting until age 70 results in larger monthly payments, providing a more substantial financial cushion throughout retirement.

  2. Inflation Protection: Social Security benefits are adjusted annually for inflation, ensuring your purchasing power remains relatively stable over time.

  3. Long-Term Financial Security: With longer life expectancies, delaying payments can mitigate the risk of outliving your retirement savings.

Cons of Delaying Social Security Payments:

  1. Deferred Income: Opting to delay means forgoing several years of Social Security income, potentially impacting short-term financial stability.

  2. Health and Life Expectancy: The decision to delay payments assumes good health and a longer life expectancy. If health issues arise, the benefits of delaying may diminish.

  3. Opportunity Cost: By not claiming benefits earlier, you miss out on potential investment opportunities or experiences during your early retirement years.

Making an Educated Decision

Deciding when to start receiving Social Security benefits is a highly individualized choice that depends on various factors, including financial situation, health, and lifestyle preferences. To make an informed decision, consider consulting financial advisors, utilizing online calculators, and accessing resources provided by the Social Security Administration.


While the allure of immediate Social Security benefits is undeniable, delaying payments can yield substantial financial rewards in the long run. By carefully weighing the pros and cons and utilizing available resources, retirees can navigate this crucial decision with confidence, maximizing their retirement income and security. Remember, the key to a fulfilling retirement lies in prudent planning and informed decision-making.