Many older Americans delay claiming Social Security until age 70 to maximize their monthly benefits. By waiting, retirees can lock in a higher payment for life. However, while this strategy can be financially beneficial, it’s not the best option for everyone.There are several valid reasons to consider claiming Social Security earlier. Here are three key factors that might make early filing the better choice for you.
1. You’ve Lost Your Main Source of Income and Need the Money Sooner
Many people plan to work until age 70, expecting to rely on Social Security later. Unfortunately, circumstances don’t always allow for that.
- Job Loss: While age discrimination in employment is illegal, older workers still often find themselves forced into early retirement. Losing a job unexpectedly could leave you with no choice but to claim Social Security earlier than planned.
- Health Issues: If you or your spouse experience health challenges that prevent you from working, you may need to file for Social Security early to cover your living expenses.
In such situations, waiting until age 70 may not be feasible. Rather than depleting savings or accumulating debt, taking Social Security benefits earlier can provide necessary financial support.
2. Your Health Isn’t Great, and Your Life Expectancy Is Uncertain
One of the primary reasons for delaying Social Security is to receive larger monthly payments over a longer retirement. However, if your health is poor and you anticipate a shorter lifespan, waiting may not be worthwhile.
- Shorter Life Expectancy: If you suspect you won’t live long enough to reap the benefits of delayed Social Security, it’s often better to start collecting sooner.
- Maximizing Lifetime Benefits: While delaying your claim results in higher monthly payments, it may reduce your total lifetime benefits if you don’t live long enough to enjoy them.
In such cases, it often makes sense to claim benefits early and make the most of the income while you can.
3. Your Spouse Needs You to File Sooner for Their Benefits
If your spouse has little to no work history, they may be eligible for Social Security based on your earnings record. Spousal benefits can be as much as 50% of your full retirement age benefit, but there’s a catch—they can’t claim spousal benefits until you file for your own.
- Helping Your Spouse Access Benefits: If your spouse is waiting on your Social Security claim to receive their benefits, delaying until 70 could leave them financially strained.
- Making the Most of Retirement Together: If your spouse wants to travel or pursue hobbies while both of you are healthy, it may make sense to claim benefits earlier.
However, if you are significantly older than your spouse, delaying your claim may increase the survivor benefit they would receive if you pass away first. Evaluating your spouse’s financial needs can help determine the best course of action.
Conclusion: Weighing the Pros and Cons of Social Security Timing
While waiting until age 70 to claim Social Security can be a wise financial decision, it’s not always the right move for everyone. If you need income sooner due to job loss, health concerns, or a spouse’s financial needs, filing earlier could be the smarter choice.
Ultimately, the best Social Security strategy depends on your personal circumstances. Take the time to evaluate your options carefully so you can make the decision that provides the greatest financial security and peace of mind in retirement.
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