Thinking about delaying Social Security? You might want to reconsider if you face certain circumstances. This article highlights critical factors to help you make an informed decision.
The Growing Temptation to Delay Social Security
Delaying your Social Security benefits can seem appealing, especially considering that you can boost monthly benefits by about 8% for each year you wait past your full retirement age (FRA). If your FRA is 67, you stand to gain a 24% increase by waiting until 70 to claim your benefits. However, navigating this decision requires careful consideration of your personal situation, particularly your health, job status, and overall well-being.
Understanding Boosting Monthly Benefits
Claiming Social Security at the right time can significantly influence your financial stability during retirement. For many, waiting to claim their benefits is a strategy aimed at enhancing monthly income. Each month you delay claiming is worth roughly 2/3 of 1% more in monthly checks—leading to substantial gains over time. Yet, this benefit may not apply to everyone.
Why Health Matters When Considering Delays
If you're dealing with poor health, the calculation for delaying Social Security changes. While you may get a higher monthly benefit for waiting, it doesn't guarantee a larger lifetime income. For example, let’s consider a scenario: with a monthly benefit amount of $1,000 at an FRA of 67, if you delay until 70 to claim your benefits, it will rise to approximately $1,240. However, if you live to only 80, your total lifetime benefit would be $148,800 from waiting versus $156,000 by claiming at 67. Therefore, if your health isn't great, opting for earlier benefits could be the smarter financial choice.
Lost Employment: A Valid Reason to Claim Early
The unfortunate reality is that older individuals may experience challenges in the job market, particularly if they encounter job loss. Age discrimination is prevalent, and many employers may overlook seasoned workers in favor of younger candidates, making it even harder to secure new employment. According to AARP, older workers frequently face long periods of unemployment, often exceeding a year, after a layoff. If you find yourself in this predicament, it could be wise to file for Social Security benefits sooner rather than later.
Poor Job Health: Prioritizing Well-Being
Working in a job that harms your physical or mental health is another strong reason to rethink delaying your Social Security benefits. Chronic job stress has been linked to serious health risks, such as heart disease and depression. If your work environment leads to detrimental health impacts, you should prioritize your well-being over the allure of a delayed benefit. The stress associated with underappreciated work or hostile work conditions can lead to a shortened life expectancy, negating any financial benefits accrued from waiting to claim your Social Security.
Conclusion: An Informed Decision
Understanding the implications of delaying Social Security requires you to evaluate your health condition, job security, and overall stress levels. While waiting to claim can indeed boost your monthly benefits, it may not always align with your personal circumstances. Taking control of your future involves choosing what is best for your health and financial needs. Each individual's situation is unique, and these considerations are crucial in navigating the complex retirement landscape. If any of these factors resonate with you, don’t hesitate to explore claiming Social Security earlier for your well-being and sustained financial health.