4 Benefits of Delaying Social Security for Middle-Class Retirees
Written by
Adam Palasciano
Edited by
Nicholas Morine
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Social Security is a key source of income and financial security for millions of retired, middle-class Americans. Currently, it’s possible to collect your Social Security as early as age 62. However, in doing so you’ll only be eligible for 70% of your full monthly benefit. If you wait until the full retirement age of 67, you’ll be eligible for 100% of your monthly benefit.
According to the IRS, the estimated average monthly Social Security retirement benefit as of January 2024 is about $1,907.
It might be tempting to collect Social Security as early as possible, but delaying it may have more financial upside in the long term.
Here are four benefits of delaying Social Security for middle-class retirees, according to the Association of International Certified Professional Accountants.
Your Lifetime Social Security Benefit Will Be Larger
The longer you choose to wait to start collecting your Social Security benefit, the higher your monthly benefit will be for life. But, this isn’t the only good reason to wait. Waiting longer to collect will also mean that your monthly benefit is higher in your 80s and 90s than someone who started collecting at the earliest age of 62. Ultimately, you’ll lock in a larger lifetime stream of income.
Your COLA Increases Will Always Be Larger
Each year, the Social Security Administration implements a cost of living adjustment (COLA) for all retirees. The annual percentage increase varies each year and is based on economic factors such as the current level of inflation. If you wait longer to collect Social Security, your monthly benefit will be indefinitely larger. So, you’ll receive a larger COLA increase every year for your entire life compared with someone who collected as early as possible.
Your Benefit Increases by About 8% for Each Year You Delay
The difference in waiting just one year past age 62 is pretty significant. The IRS explained that for each full year that you delay collecting benefits, they add an additional 8% to your monthly benefit. The longer you wait, the more your monthly benefit will compound further, largely thanks to annual COLA adjustments based on a higher monthly payment amount.
You Can Choose To Collect at Any Time After Age 62
One of the most overlooked facts about Social Security is that you can make a decision to collect at any moment once you turn age 62. This offers a primary benefit: flexibility. If you’re not ready to make a decision just yet and need more time to calculate how long you should delay collecting your benefit, that’s perfectly fine.
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