Three Situations in Which a Postponed Social Security Request Won’t Benefit You

social security

Sometimes postponing Social Security is a wise financial move, but occasionally this decision might backfire. At age 62, you can begin receiving retirement payments. However, if you wait to file your request until you are at FRA, you can avoid being penalized with monthly early filing penalties that can result in a 30% decrease in your basic payment. Additionally, if you hold on past FRA until age 70, you will get monthly postponed benefits that total a yearly 8% benefits boost. Waiting until the age of 70 to enhance monthly benefits which are reasonable for many individuals, but it may not be the best option. 

Instead, Here Are A Couple Of Situations Where Delaying Social Security Payments May Backfire: 

  1. If you have spent all of your savings

Many people cannot wait till they’re seventy to retire from work, so if they don’t apply for Social Security, they wind up being compelled to rely completely on their investment accounts. The issue is that if you withdraw a large sum of money from your deposits, you won’t invest enough and your savings will drop too quickly. 

  1. If you pass away before you begin receiving compensation or reach parity for lost benefits

Waiting to file for Social Security is a bet that you won’t pass away before receiving a sizable cheque in the future. If you wait to file for benefits, you risk losing out on several years’ worth of SS payments and betting instead that you’ll live enough to earn larger payouts in the future to make up for all the lost money.

  1. If your postponement prompts a spouse with a higher income to file sooner

Another circumstance exists where you could look back on applying for Social Security. If your spouse earns more than you do and you delay receiving the Social Security benefits while they begin receiving theirs to support your home, this might be a grave error. Benefits, you see, are determined by average wages. Therefore, your spouse would gain more if they earned more in their career.