What You Should Know About Social Security Deferral

What You Should Know About Social Security Deferral

When preparing for your retirement, one of the most important decisions you have to make is the age at which you want to commence claiming Social Security benefits.

The first time you can apply for benefits is at age 62, but if you delay past that age, you'll get bigger checks each month.

In the past, most experts recommended deferring benefits until age 70 to receive higher monthly payments. But is it still the right decision for most retirees? Here's what you need to know.

The case for delaying benefits

The age at which you apply for Social Security is a personal decision and will ultimately depend on your particular circumstances. That being said, in some cases, it may make sense to defer benefits.

A good reason to consider deferring benefits is that your monthly income will increase. If you wait until you are 70 years of age to file for benefits, you can receive up to 32% more each month than when you reached full retirement age. This can add up to hundreds of dollars a month, which can come in handy if the money runs out during retirement.

For instance, say, you have a full retirement age of 67-year-old, and at that age, you receive $1,500 per month. If you apply at age 62, the value of your benefit will be reduced by 30%, leaving you with $1,050 per month. However, if you wait until you are age 70 to file, you will receive a 24% bonus totaling $1,860 per month.

Always keep in mind that, in theory, your total benefits should be roughly the same throughout your life, regardless of what age you apply for. Each check will be smaller by claiming early, but you would have collected more throughout your lifetime. If you delay benefits, you won't get as many cheques, but each one will be bigger. However, deferring benefits may be a smart move if your goal is to maximize your monthly income.

Why it might be better to claim early

While deferring your benefits may be an excellent decision for some people, there are many reasons to consider making an early claim.

This will, for example, give you more time to enjoy your retirement. You don't have to retire and apply for benefits simultaneously, but they often go hand in hand. Not everyone wants to wait until age 70 to retire, and by claiming early, you can enjoy your retirement while you're still young and healthy.

Claiming benefits early can be particularly wise if you are experiencing health problems or if you have reason to believe that you will live a shorter than average lifespan. Again, in theory, you should receive the same amount throughout your life, regardless of when you claim it. However, these calculations assume an average lifespan. If you have health problems, you can collect more in total if you claim early.

After all, you never know what obstacles might come your way. If you're considering delaying your benefits but start having health problems, for example, you might regret waiting so long to claim.

At what age should you claim?

Before claiming, consider factors such as your financial situation, health status, and how you plan to retire.

If you have a strong pension fund and intend to take advantage of an active pension, for example, it may be a good idea to claim it as soon as possible. Alternatively, if increasing your monthly income is important, you may want to consider deferring benefits to earn higher benefits.

There are no wrong or right answers when choosing the age to apply for Social Security. But by weighing all the options and considering your unique situation, it will be easier to apply at the right age for you.


  • The age at which benefits are claimed will significantly impact retirement income.

  • By deferring benefits, you will earn more each month.

  • In some cases, the delay is the correct move. For many, however, it's best to claim early.



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