If only I had Waited Longer to Claim SS

“Hindsight is the best Foresight”

As the old adage goes, “hindsight is the best foresight” and nowhere is that more evident than with some we counsel at the AMAC Foundation’s Social Security Advisory Service. We regularly speak with older seniors who say, if only they knew how long they were going to live they would have waited longer to claim Social Security. More of a cliché than an adage,the “hindsight” phrase laments the fact that no one can predict their life expectancy but, if only they had known they would live to a ripe old age, they would have waited longer to get a higher SS benefit. This is sometimes the case with those who have already reached a more advanced age, and who would very much appreciate (and benefit from) a higher monthly Social Security payment.

A Little Background

For background, Social Security benefits taken at age 62 are reduced by 25% to 30% from that available if claimed at the person’s full retirement age. Your full retirement age (your “FRA”) is when you get 100% of the Social Security benefit you’ve earned from a lifetime of working. A person’s FRA is determined by their year of birth: for individuals born between 1943 and 1954, FRA is age 66; for individuals born between 1955 and 1959 their FRA increases by two months for each year after 1954; and for those born after 1959, FRA is age 67.  Claiming before FRA means a reduced benefit and delaying until after FRA yields a higher benefit. Age 70 is when you can get your maximum Social Security benefit, about 75% more than a benefit claimed at age 62, and 24% to 32% more than available at the person’s FRA. Obviously, for seniors in their 80s who are struggling to make ends meet, the thought of a higher monthly SS check, if only they had waited longer to claim, can be something to fret about.

Claiming Age Distribution

However, fretting about past decisions offers nothing but stress. And you might find solace in the fact that a majority of those applying for Social Security claim benefits before their full retirement age. Indeed, over 60% of SS recipients claim benefits before their FRA, with about 30% claiming as soon as they are eligible (age 62). About 34% claim at their full retirement age, leaving only a small remaining group who seek a larger SS benefit by earning Delayed Retirement Credits (DRCs) after FRA. Thus, if you claimed benefits before your full retirement age, you are in the majority and in good company. And if you waited and claimed at or after your FRA, you might be considered exceptionally smart. But maybe not.

Deciding When to Claim

People make their claiming decisions based upon several factors, some valid and some not. For example, many people just claim Social Security blindly, simply because “it’s there” and available, without fully understanding the ramifications of that decision. And some claim early because they think SS is going bankrupt (it’s not). But from a strictly logical standpoint, when to claim SS should consider these factors:  the person’s financial need, their plans for working (if claiming early), their marital status, and their estimated longevity.

In reality, claiming early makes perfect sense if you do not expect to live a reasonably long life. In that case, claiming early is the most logical choice to get as much SS as possible before you die. But even in that case, you must still consider whether you plan to work after claiming early benefits. That’s because Social Security limits how much you can earn when collecting benefits prior to your FRA.

Conversely, waiting longer for a higher monthly amount is a prudent choice if you can afford to do so, and if you have at least average life expectancy (about 84 for a man; 87 for a woman of SS age). In today’s world, many choose to continue working after age 62, which can provide them with the income needed to delay SS in favor of a higher monthly benefit. And that higher benefit will be very much appreciated as they age. Spouse benefits, and the timing thereof, are also a consideration, and the picture changes yet again if there are minor or disabled adult children in the mix.

What if I’ve Already Claimed?

But suppose you have already claimed your Social Security benefits and now regret that decision. What can you do?

Well, if you applied for Social Security benefits less than 12 months ago, you could withdraw your application and, thus, allow your monthly amount to grow, thus providing a higher benefit at a later age. But that would require you to repay all SS benefits already paid, which may not be a financially feasible option.

If you have already reached your full retirement age (FRA) and are not yet 70, you might consider suspending receipt of your monthly benefits to get a higher amount when you restart your monthly payments at a later age. Done this way, you do not need to repay all previous SS benefits, but you will need to adjust your lifestyle to temporarily do without your Social Security income. That might work if you have other income or savings to replace your suspended SS benefits. But it is a choice available to earn Delayed Retirement Credits (DRCs)[1] and get a higher SS benefit later.

However, if it has been more than 1 year since you applied for SS benefits, or if you are already 70 years of age or more, you are, unfortunately out of options to increase your SS benefit amount. You will, of course, still receive any annual Cost of Living Adjustments (COLA) awarded to provide at least some measure of higher benefit as you continue to age.

In the end, we all make consequential decisions over our lifetime, and when to claim Social Security is often an irrevocable choice. So, as tempting as it may be to speculate how much easier life would be if your SS benefit was larger, it is much better to simply be comfortable with your claiming choice, especially if you can’t change it using one of the options described above. Above all, lamenting your pervious choice isn’t worth the emotional stress it induces.

What if I’m Only Now Thinking About Claiming?

And if you are now only considering applying for SS benefits, it would be very prudent to discuss your claiming options with the AMAC Foundation’s accredited and certified Social Security Advisory staff. Social Security is a complex topic and the AMAC Foundation’s SS Advisors can help you understand your best options for claiming after evaluating your specific personal circumstances. Call us at 1.888.750.2622 or send us an email to SSadvisor@amacfoundation.org. We’re here to help – and there is never a fee for our SS Advisory services.

[1] Delayed Retirement Credits (DRCs) are no longer earned after 70 years of age is attained.

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.