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Is It Always Wise to Delay Social Security?

Filed under: Social Security Planning, Retirement, Supplemental Retirement Income

As a retiree, one of the biggest decisions you’ll make is determining when to file for Social Security benefits. Why is it such an important decision? Because it’s permanent. Once you start benefits, you can’t change them or reverse your decision.

The commonly accepted wisdom is that it’s always best to wait as long as possible to file for Social Security. Generally, the longer you wait, the higher your benefit will be. You can file for benefits as early as age 62, but your benefits could be permanently reduced by as much as 30 percent.1

If you wait until your full retirement age (FRA), you won’t see any reduction in your benefit. For most people, their FRA is sometime between their 66th and 67th birthdays.2

However, if you wait beyond your FRA, you get an 8 percent permanent benefit increase for each year you delay benefits. You can delay all the way to age 70. So if your FRA is 66 and you wait until 70, you’ll get a full 32 percent increase, 8 percent for each year you waited.3

Clearly, the way to maximize your payment is to wait as long as possible to file. However, is that always the best strategy? Are there valid reasons to take benefits early and accept the reduction? Below are a few reasons why it may not make sense to wait:


You don’t expect to live long in retirement.

It’s true that you will get more income by waiting to file for benefits. However, what if you don’t live long enough to enjoy that extra income? What if you don’t even make it to 70?

You may have reason to believe that you won’t live long in retirement. Perhaps you have a chronic illness or injury that will likely cut your life short by several years. Or maybe your family has a long history of short life spans.
Whatever the reason, if you are confident that you won’t live long in retirement, you may want to file early. Then you can at least capture the benefit you have available, even if it is reduced.


You need the money.

Maybe you were forced into retirement earlier than expected because of a layoff or disability. Or perhaps you have medical debt or some other financial challenge that has made it difficult for you to live comfortably.

On paper it may make sense to wait as long as possible to file for benefits. However, it may not make sense to live in poverty while you await that date. If you need income and Social Security is your only potential source, you might want to consider filing early. You may simply have to adjust your budget and lifestyle to account for the reduced income.


You plan on living a frugal lifestyle in retirement.

Perhaps you simply don’t care about your benefit being reduced. You may have other priorities than capturing as much income as possible. For example, maybe you’re eager to start volunteering and doing philanthropic work, and are confident you can live within the constraints of a reduced benefit.

If you have developed a tight, accurate budget and are comfortable living within that budget, you may want to consider filing early. That’s especially true if you have some goal or objective that necessitates retiring as soon as possible. Having increased income is nice, but not if it stands in the way of your life’s dream.

Not sure when to file for benefits? Let’s talk about it. Contact us at Ambrose Financial & Insurance Services in Walnut Creek, California. We can help you determine when it may be the right time for you to file for benefits. Let’s connect soon.






The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit

This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

CA Insurance License No. 0F95178

15937 – 2016/7/28