Because of this, financial advisors generally recommend that you hold off on claiming as long as you can. Admittedly, that can be a gamble.
“You’re always betting you’ll live longer and get more money,” said Geri Eisenman Pell, CEO of Pell Wealth Partners at Ameriprise Financial. “The government is asking us to make a calculated risk decision on something we’ve been mandated to pay into and take a risk on the back end.”
It only makes sense to put in for benefits early in limited circumstances, said John Piershale, wealth advisor at Piershale Financial Group.
“If you’re going to take it at 62, if you’re single and you’re terminally ill and you know you’re not going to live very long, then you might go ahead and file early,” Piershale said.
Most other situations don’t make sense to claim early and take that permanent reduction, according to Piershale. Say you know you won’t live a long time, for example. If you’re married, claiming early could lessen the amount of benefits your spouse will have access to once you’re gone.
“You can still help out your surviving spouse,” Piershale said. “Once they get that survivor benefit, that’s permanent.”
Survivor benefits are determined by the age an individual dies and the amount of Social Security credits they had accrued. By waiting to claim benefits, you will have a greater number of credits and hence a larger benefit, to pass on when you die.
But how much of that amount survivors can access also depends on when they claim the benefit.
Individuals can file for widow or widower benefits starting at age 60, but that benefit amount will be reduced. If a surviving spouse waits until their full retirement age, they are eligible to receive 100 percent of their spouse’s benefit amount.