Three Ways to Delay Claiming Social Security Benefits

An older man sits on his sofa and looks at his laptop. — (Image credit: Getty Images)

Social Security has been a huge source of financial support for Americans since it was first enacted back in 1935. Right now, you must be at least 62 years old to be eligible for benefits. From there, you can claim benefits at any time up until age 70, but the age you choose to start claiming them determines the amount you’ll receive each month.

Generally, it’s best to wait as long as possible to claim your Social Security benefits. That’s because the longer you wait, the more money you’ll receive. The Social Security Administration encourages this by offering incentives to those who wait to claim. Right now, Social Security benefits increase 8% per year until you reach 70. So, how can you support yourself in the meantime?

1. Draw from 401(k)s, IRAs and annuities first.

First, you need to figure out how to create a sustainable income stream. If you’ve planned for retirement, you’ve probably contributed to a 401(k) or IRA account during your working years. If you’re looking to retire before 70 but want to delay claiming benefits, consider drawing money from these accounts or any annuities you may have.

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This allows you to support yourself without needing to rely on Social Security right away, but it works only if you’ve adequately planned for your retirement and have saved enough money.

2. Push back your retirement a few years.

It's no secret that Americans are living longer, and that means your retirement could last longer than you think. According to the American Psychological Association, one out of every four adults who are 65 today will live past age 90. One in seven will live until at least 95. With this in mind, you may want to consider pushing back your retirement a few years if you want to delay claiming benefits.

This doesn’t mean you need to be 70 to retire, and it certainly doesn’t mean you need to jeopardize your health in doing so, but delaying retirement a couple of years allows you to continue saving. If your circumstances allow, working just a couple of years longer can help you become more financially stable in the long run.

3. If you’re married, claim benefits at different times.

There’s another strategy for delaying benefits that applies specifically to married couples. If you and your spouse are both eligible to claim Social Security, whoever earns the least amount in benefits should claim first. Doing this allows you to earn supplemental income while maximizing your returns. Remember, the longer you wait to claim, the more money you’ll receive.

Applying this strategy to the spouse with higher earnings allows you to maximize the benefits you’ll receive each month. By claiming one at a time, with the highest-earning spouse claiming last, you can maximize your wealth and increase financial stability and security.

If you’re planning to delay claiming Social Security benefits, it’s still important that you enroll in Medicare coverage as soon as you become eligible. The federal health insurance program is available to all Americans who are at least 65. If you don’t, your coverage could cost more.

Waiting to claim benefits is a great strategy, but it doesn’t work for everyone. Those with extenuating health concerns or limited savings should consider claiming benefits as needed. After all, it is a supplemental aid that is meant to provide financial support in retirement.

However, if you’re in a place to delay claiming Social Security, it’s not a bad move to make because it allows you to maximize the benefits you’ve spent your working years paying into.

Before making any final decisions, consider consulting with a financial adviser who can help you figure out the best option for your financial situation.

Patrick Simasko is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. Simasko Law is a separate entity and not affiliated with CoreCap Advisors. The information provided here is not tax, investment or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Patrick M. Simasko is an elder law attorney and financial adviser at Simasko Law and Simasko Financial, specializing in elder law and wealth preservation. He’s also an Elder Law Professor at Michigan State University School of Law. His self-effacing character, style and ability have garnered him prominence and recognition throughout the metro Detroit area as well as the entire state.