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Eric Rothenberger

Remax Central

Why You Might Want to Delay Your Retirement

If Social Security benefits are your only means of paying for retirement, then you’re probably best off collecting them as soon as you are eligible. But if you can hold off a few years, the benefit increases substantially.

Claiming Social Security at age 62 reduces benefits by as much as 30 percent versus waiting until the full retirement age of 67. Waiting beyond full retirement age until age 70 to claim benefits adds much more—8 percent per year.

The amount you receive when you first get benefits sets the base amount you will receive for the rest of your life. Future cost-of-living adjustments will be based on that bigger benefit. Called COLAs for short, the adjustments are automatic and are meant to fight inflation.

Find Your Full Retirement Age
To calculate how much your Social Security benefits can increase by delaying them, use the retirement calculator on the Social Security Administration (SSN) website. Look up your full retirement age, which was 65 for many years but has gradually been increased to 67 for people born after 1959.

Here are the reductions for someone with a full retirement age of 67 who starts benefits at age:

  • 63: About 25 percent
  • 64: About 20 percent
  • 65: About 13.3 percent
  • 66: About 6.7 percent

For someone with a full retirement age of 67, a $1,000 monthly benefit would drop to $700 if they started benefits at age 62, according to the SSN website. They’d get the full $1,000 if they waited 60 months to turn 67.

Advantages and Disadvantages
Benefits are reduced before full retirement age as a way to make up for the more time a retiree collects Social Security. As a general rule, early or late retirement will provide about the same Social Security benefit totals over a lifetime.

Retiring later will provide benefits for a shorter period of time, but the monthly amounts will be larger to make up for the months when no money is paid.

If you are trying to decide the right time to start getting benefits, consider the following factors:

  • Are you still working?
  • How is your health?
  • Do you come from a long-lived family?
  • Do you have health insurance?
  • Do you have alternative sources of income to support you?