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Top  5 Reasons to Delay Social Security Benefits

Deciding whether to take social security benefits early or to delay can be complex. The optimal situation for you depends on several factors, such as the amount you have saved, life expectancy, expected rate of return, and marital status. In this post, I want to highlight the top 5 reasons you should consider delaying your benefits. 

1. You Will Get a Higher Monthly Payout 

One of the main advantages of delaying your benefits is that you will get a higher monthly payout. The amount of your benefit is based on your average earnings over your 35 highest-earning years, adjusted for inflation. If you claim your benefits before your full retirement age (FRA), which varies depending on the year you were born, your benefit will be reduced by 6.67% for the first 3 years before full retirement age and then go down by 5% each additional year until age 62. Conversely, if you delay your benefits past your FRA, your benefit will increase by 8% each year until age 70.

This table shows your full retirement age depending on when you were born:

2. Hedge Against Longevity Risk

Another benefit of delaying your benefits is that you will hedge against longevity risk, which is the risk of outliving your savings. Social Security is a guaranteed source of income that lasts as long as you live, and it is adjusted for inflation every year. Therefore, the longer you live, the more valuable your Social Security benefits become.

The breakeven age for delaying Social Security is currently below the average life expectancy, meaning that the average person would receive more money over their lifetime by delaying their benefits than by claiming them early. 

The guaranteed rate of return generated by delaying social security benefits becomes quite attractive for those who live longer than average: 

3. You’re Still Working

If you’re working before your full retirement age, your social security benefit is likely going to be reduced if you take it early. If you are under full retirement age for the entire year, Social Security will deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2023, that limit is $21,240.

Working additional years at the end of your career can replace lower earning years (or non-working years) in your social security record. Since your benefits are based on the highest inflation-adjusted 35 years of your earnings, this can provide a nice boost to your benefits. 

4. To Maximize Spousal Benefits or Future Survivor Benefits

Delaying benefits can help to maximize spousal benefits and future survivor benefits. Spousal benefits are equal to half of your full benefit amount if they claim at their FRA or reduced if they claim earlier. Survivors benefits are equal to 100% of your full benefit. Thus by delaying your benefit, you can increase both the spousal benefit and their future survivor benefit. 

5. You Can Change Your Mind and Claim Benefits at Any Time

One of the best features of Social Security is that you can change your mind and claim benefits at any time, as long as you are between age 62 and 70. This gives you an added layer of flexibility and control over your retirement income. If you decide to delay your benefits and your life circumstances change, such as a health issue or a financial emergency, you can always start taking your benefits right away. You will receive a higher monthly payout based on the age when you claim.


Delaying Social Security benefits until age 70 can be a smart strategy for many retirees who want to maximize their retirement income and hedge against longevity risk. However, it is not a one-size-fits-all solution. You should consider your personal situation, such as your health status, life expectancy, financial needs, and legacy goals, before deciding when to claim your benefits. You should also consult with a qualified financial planner who can help you create a comprehensive retirement plan that incorporates Social Security and other sources of income.

If you have any questions about Social Security or retirement planning in general, please feel free to contact me.  Sophos Wealth Management is a fiduciary wealth management firm that specializes in helping clients achieve their financial goals and live their best lives.

Scott Caufield, CFA, CPA