Conventional wisdom says that waiting to claim Social Security is the best way to make the most of your benefits. Here’s why it’s not the best path for everyone.
Banks that handle the Social Security debit card you are changing
The Treasury Department is changing the banks that handle recipients’ debit cards, with Bank 3 replacing Comerica Bank instead of Bank 5.
Americans are tired. From work worries to the overall mental strain of trying to juggle everything, many people are ready to take a break. According to the 2025 Empower Survey, Americans want to retire at the average age of 58 and want to have at least $1.06 million left in their retirement accounts.
Unfortunately, this is easier said than done. Considering the average 58-year-old has $261,000 set aside for retirement, there’s a significant gap to fill. For many people, the only solution is to work until at least age 70, when they can collect the maximum Social Security benefits they are eligible for.
hidden costs
opportunity cost
If you delay enrolling in Social Security between the ages of 62 and 70, you’ll forgo 12 monthly checks each year. Waiting until age 70 means missing out on a total of 96 benefit payments. For example, if you’re 62 years old and entitled to $1,500 a month, that’s $144,000 in benefits that you can invest, spend on everyday necessities, or delay access to retirement accounts.
break-even point
Planning for retirement usually involves figuring out your break-even point. This is the age at which the additional benefits you receive from claiming Social Security later are equal to the amount you would receive if you chose to start earlier. However, the time value of money is ignored when calculating the break-even point.
Let’s say you withdraw $25,000 a year from your IRA while you wait for your larger Social Security benefits. Over eight years, you will withdraw $200,000 from your retirement account. This money could have continued to be invested and continue to compound.
tax increase
By claiming it sooner, you can spread your retirement income more evenly over the years, potentially keeping your taxes much lower in retirement.
For some people, delaying Social Security is the right thing to do. For example, people who come from long-lived families and live long lives themselves, or those who started saving for retirement late, may benefit from waiting.
However, not everyone is eligible. The best strategy will depend on important issues such as your health, how you plan to spend your retirement, and your overall financial situation. As you plan, remember to consider the pros and cons associated with both waiting for benefits and applying early.
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