Are you searching for that magic moment that will give you the most from Social Security? How do you find it? Where will you look?

Waiting for Social Security Can Cost You

You can begin collecting Social Security any time between the ages of 62 and 70. The earlier you apply, the lower your monthly payment will be – as much as 30% less. The later you apply, the higher your monthly payment will be – as much as 32% more.

Waiting as long as possible might seem like the best option… but it’s not quite that simple. In fact, for most of us, it’s not a good choice. Waiting until 70 will give you the highest monthly payment, but you will have missed out on 96 payments between the ages of 62 and 70 or 48 payments between 66 and 70.

So, how much money do you lose?

If your payment at Full Retirement Age were to be $2,000, by waiting, you would lose $134,400 over the eight years between 62 and 70. In the four years between 66 and 70, you would let $96,000 go by.

Do You Get It Back?

You might. Because your monthly payment is higher when you wait, you will eventually make up the difference, but it will take 10-15 years.

You have to live until at least 80 to make waiting until 70 pay off.

According to the Centers for Disease Control (CDC), the average life expectancy for men is 78.8 years and 81.2 years for women. Those don’t seem like very good odds.

Here are some considerations for thinking through the decision on whether to wait or collect.

How Long Will You Live?

What is your family and personal medical history? Do your relatives live into their 90s? Do they suffer from any major illnesses? Did you smoke, drink, exercise, eat well? How healthy are you?

You have to be alive to collect Social Security. If you die, you waited for nothing.

Spousal Benefit

If you or your marriage partner plan on collecting spousal benefits, you will be missing out big time.

Spousal benefits are 50% of the higher wage earner’s payment amount. If John gets $2,000 per month at 66, his spouse, Mary, will get $1,000 for a total of $3,000. Between the two, that could be a loss of $144,000 over four years.

If John waits until age 70, the 8% increase per year John receives in Delayed Retirement Credits will not compensate for the amount they lost.

Work, Work, Work

Do you plan to work? If you are between the ages of 62 and 66, there is a $1 penalty for every $2 you earn over $16,920 in a year. That’s half. Depending on your earning level, waiting until 66 to collect could be your best option.

Once you reach 66, there is no limit to the amount you can earn without penalty.

What About a Survivor?

Providing for your spouse may be your one valid reason for waiting. When one spouse dies, the survivor gets only one Social Security payment, not two. It will be the higher of his or her own benefit, or the benefit of their spouse.

If, as a couple, you each receive a Social Security payment monthly, when one spouse dies, the survivor gets only one check – the higher of the two. Having the partner with the highest earnings wait to collect will provide the largest payment possible for the surviving spouse when he or she is receiving only one benefit.

This is when many elderly women fall below the poverty level. This is especially true if they do not know this will happen and have not prepared to live on less.

Time Trumps Money

As we age, time becomes a precious asset. Many people feel that the years between 62 and 70 may be the best they have left. They feel vital and energetic and are physically capable of enduring arduous travel and activities.

You may want to climb Kilimanjaro, spend more time with your grandchildren, open a coffee shop or pursue other hobbies or adventures. The funds from Social Security may give you that opportunity.

So you see, there is no blanket best time to begin collecting Social Security. There is only the right time for you. Your circumstances and desires will guide you to make the choice that gives you the best and brightest future.

What age did you start, or plan to start receiving Social Security? What factors did you consider in your decision-making? Do you have suggestions to share with other members of the Sixty and Me community? Please join in the conversation.