Why Delay Claiming Social Security

Americans are allowed to claim social security benefits at age 62. Even so, a growing number are waiting until closer to age 70. Here’s why.

Under the Social Security Act, older adults are allowed to collect Old Age, Survivors & Disability Insurance (OASDI) as early as age 62. However, according to the Center for Retirement Research at Boston College, more people are waiting longer to receive their social security benefits. In 2005, 55 percent of men and 60 percent of women began claiming SSI at age 62. As of 2013 those numbers have dropped to 36 percent of men and 40 percent of women.

Waiting to Claim Social Security Could Get You More Money

Many people are choosing to delay their social security insurance benefits because by doing so they will be entitled to more money each month later on. By claiming benefits at age 62, your benefits could be permanently reduced by as much as 25 percent compared to if you wait until age 70.

Since most couples rely on social security for most, if not all of their income, that can make a big difference. At the beginning of 2015, the average monthly social security payment was $1,328 per month, or $15,936 a year. That is just above the federal poverty level. By delaying a claim on social security until age 70, older Americans can ensure a higher standard of living.

Social Security Benefits are Based on What You Put In

You may also want to postpone receiving your social security benefits if you have not made enough contributions into the system. Before you can be eligible for SSDI or OASDI, you must have worked and paid social security taxes on a specific number of “quarters.” This is based on your yearly income. If you have had a long period of unemployment this could affect how soon you will be entitled to social security and how large a benefit you will receive.

For example, financial blogger Jennie L. Phipps of Bankrate.com described a conversation she had with a friend retiring at age 70:

Like many women who raised a family, she didn’t earn very much until she was in her 50s, so even though she has maxed out her Social Security, she is only receiving $2,337 per month, slightly more than $28,000 a year. From that, Social Security will deduct $104 a month, or $1,248 a year, to pay for Medicare.

My friend was distressed by this total. “I could live well on $3,501 a month. Even $2,663 would help a lot,” she complained.

By working longer and continuing to contribute, you can increase your total quarters and your pay out.

Deciding when to begin claiming SSDI can be difficult. Particularly when a disability is involved, it is a good idea to discuss your options with an experienced social security disability attorney. William Crawforth has been representing disabled people throughout Michigan for over 30 years. He can answer your questions and help you through the process. If you or someone you love are considering applying for social security benefits, contact William Crawforth today for a consultation.