When Is the Right Time for You to File for Social Security?

The question of when to file for Social Security retirement benefits often creates a tough dilemma for retirees. Many people choose to file for their benefits as soon as they become eligible. Others prefer to delay filing as long as possible.

Filing early provides you with an immediate source of guaranteed income. Delaying Social Security increases the benefit you’ll ultimately receive down the road. So when is the right time to file?

The truth is, there’s no one right answer to that question because it depends on your individual circumstances. The best time for you to file for Social Security should be determined by your unique needs and goals.

Whatever you ultimately choose, it’s important to consider your options carefully. It may be one of the most important decisions you make affecting your retirement. Once you decide to file, you can’t change your mind.

Below are a few things you may want to take into account as you prepare to make this major decision:

Do you need the money now?

It’s important to differentiate between wanting the extra income now and actually needing it. If you truly have a dire need for the money and have no other income options, this can be a compelling reason to file as soon as possible. After all, there’s little sense in living in poverty just so you can get a higher payment in the future.

If you don’t really need the income, however, you may be better served by waiting. The reason for this is that your benefits will increase 8 percent for each year you delay filing after you’ve reached full retirement age. For example, if your full retirement age is 66 and you wait until age 70 to file, you would get an 8 percent increase in benefits for each of the four years that you delay, adding up to a 32 percent increase.¹ If you’re able to hold off, you can substantially increase the amount of your monthly Social Security check once you do file.

What’s your health status?

There may be little point in waiting to file for Social Security if you don’t expect to live long enough to enjoy the benefit for more than a few years. This might be the case if you have a chronic long-term health issue that could shorten your life, such as heart disease or cancer, or a family history of certain ailments causing early death. If you have legitimate reason to believe you have a shortened life expectancy, filing early may be the right move for you.

However, it may not be wise to make this judgment based on family history alone. Advances in modern medicine are giving people with these types of health problems longer lifetimes than ever, and new technologies are rapidly developing and evolving every day. It’s important to keep in mind that genetics aren’t necessarily destiny.

Can you utilize the spousal benefit?

If one spouse has had less career earnings than the other during your marriage, you may be able to take advantage of a spousal benefit. If you were the lesser wage earner, this strategy lets you receive a Social Security benefit based on your spouse’s income rather than your own.

You may be able to take advantage of this option to maximize your benefits. For instance, you could file as early as possible while your spouse delays. Then, once your spouse files, you can switch to the spousal benefit, thereby increasing the amount of your income. You and your spouse may want to consult your financial professional and strategize together to find the optimal choice to fit your needs.

Ready to plan your Social Security strategy? Let’s talk about it. Contact us at WMS Group for more information. We can help you analyze your needs and develop a strategy. Let’s connect soon.

¹https://www.ssa.gov/planners/retire/1943-delay.html