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Timing Social Security Benefits

There have been plenty of studies examining the mass of data collected about Social Security including the timing of claims, the average benefits, the annual adjustments to benefits, claiming strategies and more. One fairly consistent finding of these studies is that a significant number of workers claim their benefits as soon as they are available and very few defer their initial claim for benefits to age 70. The consensus seems to be that those who claim when first eligible, age 62, are making a mistake that will cost them greatly in terms of the total benefits received over a lifetime.
At the other end of the spectrum, despite much being said about the great advantage of 8% annual benefit growth for those who wait to claim for years after reaching full retirement age, it apparently has not caught on. Of course, the statistics may be misleading since under prior law, one could claim and suspend at full retirement age and still receive the benefit of that 8% annual increase while a spouse could receive benefits on the suspended worker’s record. That would not be an initial claim at age 70 but would sure be getting that higher benefit.
Depending on one’s personal situation, that early claim may make sense where the claimant is not working, has few other resources and a limited life expectancy. To build value for a longer life expectancy and to potentially enhance a spouse’s benefit options, waiting to claim makes very good sense. If one is still working or has substantial resources such as pensions, annuities and other assets, then waiting to make that claim has a positive impact. With many folks worried about outliving their money, deferring that benefit claim for Social Security may be the best choice they can make.
If in doubt, get advice from your financial adviser to see how waiting may benefit you. 

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