Social Security: Why It Pays To Retire Later


Social Security benefits can be claimed as early as age 62, but for most people, delaying retirement until age 70 is often the better option. Experts are now recommending waiting as the longer you wait to claim your benefits, the higher your monthly benefit will be.

Yet, a recent study shows that the most popular age to claim Social Security is still age 62, although that number is dropping. While you may want to gain access to your money now or gain some financial relief, it often pays to retire later. Ideally, waiting until full retirement age (66 to 67) is the best option. Here’s why:

Bigger Payments

Did you know that waiting until the full retirement age to claim Social Security will increase the size of your benefit by 8% per year? For those with a full retirement age of 66, this could equate to a 32% increase in your monthly benefits.

Those who delay claiming Social Security will receive larger payments for every year they delay claiming up until the age of 70. After 70, there are no additional benefits to delaying your Social Security claim.

Larger Survivor Benefit Payments

Delaying your Social Security claim could also mean larger survivor benefit payments. Married couples have the option of claiming Social Security based on their own work record, or up to 50% of the higher earning spouse’s benefit. Ex-spouses will also be eligible for Social Security benefits if they were married for at least 10 years.

Couples also have the option of claiming spousal payments, and then switching back to payments based on their own work record in the future. These payments would then be higher because they decided to delay their claim.

The bottom line is this: delaying your Social Security claim will lead to bigger monthly payments and larger survivor benefit payments. If you can, wait until you reach full retirement age, or 70 if possible, to make your claim.



  1. What is missing in this analysis is the value of the payouts between 62 years and 70. 8 years of the lower monthly payments is a great deal of money. Those who elect to delay will get more money each month, but it will take many years for the extra dollars to equal 8 years of payments. Add to that the opportunity value of the 8 years of payments that could be used to pay off debt and avoid interest, or even better, invested so that it gains interest. The value off that opportunity adds to the number of years to reach the break even point.

    Anyone looking at early vs later Social Security payout owes it to themselves to put their numbers in a spreadsheet to project that breakeven point. It can be a much better move to take the early payout depending on the individual’s unique financial and personal situation. For example, someone with health issues who doesn’t expect to reach 80 years old might collect far more money by electing payout at 62. And of course, there is the issue of what the early payments will enable in terms of lifestyle.

    The worst outcome of all is waiting to retire later for the higher monthy payment but expiring before you get a dime.


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