Should I Delay Social Security Benefits?

Deciding when to claim Social Security benefits is one of the most important financial choices you’ll make. This decision can significantly impact your retirement income, so it’s crucial to approach it with careful thought and planning. At Harvest Wealth Partners, we believe in empowering individuals to make informed choices that align with their financial goals. If you’re wondering whether delaying Social Security benefits is right for you, here’s a balanced perspective to help guide your decision. 

Key Considerations in Your Decision

Your Financial Needs

Your current financial situation should play a central role in deciding when to take your Social Security benefits. If you need the income to cover basic living expenses or healthcare costs in retirement, starting benefits early may make more sense. However, if you have other sources of income or savings to draw from, delaying benefits could offer significant advantages. 

The additional income from delaying can help strengthen your financial independence later in life, particularly when other savings might start to decline. If you can bridge the gap with savings or other investments, postponing Social Security could prove beneficial over the long term. 

Life Expectancy and Health

Life expectancy is another important factor to consider. While none of us can predict the future, it’s helpful to evaluate your overall health, family history and personal circumstances. Delaying Social Security benefits until age 70 results in an 8% annual increase in your monthly payment beyond full retirement age. This can be advantageous if you live well into your 80s or 90s, as your monthly benefit will compound over time. 

On the flip side, if you have health issues that may impact your life expectancy, starting benefits earlier might be the more practical choice. It’s worth noting that delaying may also benefit a surviving spouse, as they would receive the higher amount if you pass away first. 

The Impact of Cost-of-Living Adjustments (COLA)

Social Security benefits are adjusted for inflation through annual cost-of-living adjustments (COLA). By delaying benefits and locking in a higher initial payment, your COLA increases can also be higher, which can provide financial independence in later years. For example, a 5% COLA on a higher benefit amount results in a larger dollar increase, giving you more of a buffer against rising living costs. 

Balancing the Pros and Cons

Potential Pros of Delaying Social Security 

• Lifetime Income: Benefits have approximately an 8% growth potential annually after full retirement age for every year you delay, up to age 70. 
• Tax Advantages: Social Security benefits are often taxed at a lower rate than other retirement income sources, creating long-term tax diversification. 
• Flexibility: If circumstances change, you can start benefits any time after reaching full retirement age—and even receive up to six months of retroactive payments if needed. 

Possible Cons of Delaying Social Security 

• Break-Even Point: It can take 12–14 years to recoup the income you forgo by delaying. 
• Uncertainty: Concerns about the future of Social Security or the impact of stock market fluctuations on retirement investments may lead some to claim earlier. 
• Immediate Needs: If you require income for daily expenses or unexpected costs, delaying might not be practical. 

Confidently Pursue Your Future

The decision to delay Social Security is not one-size-fits-all. It involves a range of personal and financial factors, from your immediate needs to your long-term goals. At Harvest Wealth Partners, we specialize in helping individuals like you evaluate their options and create tailored retirement plans that bring clarity and confidence to their financial future. 

If you’d like to explore your options in greater depth or align your Social Security strategy with a comprehensive financial plan, we’re here to help. Contact Harvest Wealth Partners today to schedule a personalized consultation and take the first step toward the retirement you desire.