Experts Advise Delaying Social Security Claims to Maximize Benefits

Financial experts issue critical warnings to Americans to evaluate delaying their Social Security claims to maximize their retirement benefits, according to a CNBC article published on April 25, 2024. The age at which retirees begin collecting Social Security has a significant impact on their monthly income for the rest of their lives.

A recent study found that while only 4% of retirees file for Social Security at age 70, approximately 57% of participants could have earned more over their lifetime by waiting until 70 to claim benefits. In contrast, claiming prior to age 64 was found to be the least optimal, with only 6.5% of retirees maximizing their lifetime income by filing at ages 62 or 63.

The financial advantage of delaying Social Security is substantial. On average, retirees who wait until age 70 to collect benefits receive around $739 more per month compared to those who claim at age 62. However, experts stress that the optimal claiming age depends on individual circumstances, such as retirement priorities and health considerations.

Why this matters: The decision of when to claim Social Security benefits has far-reaching implications for the financial well-being of retirees. By understanding the potential benefits of delaying claims, Americans can make more informed choices to maximize their retirement income and ensure a more secure financial future.

Tyson Thacker and Ryan Thacker, retirement experts and leaders of B.O.S.S. Retirement Solutions, warn that "96% of Americans lose an average of $111,000 in Social Security income due to filing mistakes, stemming from the complexity of the system." They stress the importance of a personalized approach, as every individual's situation is unique, and offer a free comprehensive Social Security Matters Analysis to help Utah retirees navigate the complex system and maximize their benefits.

The article also highlights three lesser-known social security rules that can significantly impact retirement strategies, such as the ability to withdraw an application within 12 months, suspend benefits once reaching full retirement age, and the impact of the retirement earnings test on benefits for those who work while collecting Social Security before full retirement age.

As the Social Security Trust Fund faces challenges and potential depletion as soon as 2032, which could lead to reduced benefits, experts emphasize the importance of careful planning and informed decision-making when it comes to claiming Social Security benefits. By understanding the intricacies of the system and considering individual circumstances, retirees can make choices that optimize their retirement income and provide greater financial security in their later years.

Key Takeaways

• Experts urge Americans to delay Social Security claims to maximize benefits.
• 57% of retirees could earn more by waiting until age 70 to claim benefits.
• Delaying to age 70 increases monthly income by $739 on average vs. age 62.
• 96% of Americans lose $111,000 in benefits due to filing mistakes.
• Social Security Trust Fund depletion by 2032 may reduce future benefits.