Why One Social Security Expert Argues Couples Waiting Until Full Retirement To Claim Benefits Is ‘Gamble’
Written by
Vance Cariaga
Edited by
Daria Uhlig
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For most Americans, the decision on when to claim Social Security benefits is easy: You should wait as long as possibly, preferably to age 70, before claiming benefits because the longer you wait, the bigger your monthly check. But like most rules, there are exceptions. If you have a medical condition that could shorten your life, you have a lot of debt to pay off or you’re in need of immediate income, then it makes sense to file for benefits as early as possible, which is age 62.
Couples could also benefit from filing for Social Security benefits early, according to Sylvia Gordon, president of Gordon Marketing, a field marketing organization that distributes Medicare and other insurance products. Gordon, best known as the money expert behind the TikTok account @TheMedicareFamily, told Newsweek in a recent interview that waiting to collect Social Security is not always the best strategy.
“Almost every financial planner will advise to wait to max out benefits at your full retirement age,” Gordon said. “I’m in the opposite camp. There is no promise of tomorrow. If you already have some chronic conditions and may have a shortened life expectancy, why gamble?”
She also warns against waiting too long to collect spousal benefits because of the way they are calculated.
As GOBankingRates previously reported, a spousal benefit can be up to one-half of the main earner’s primary insurance amount, or PIA2. The PIA is the benefit you’re entitled to if you wait until full retirement age to claim your benefit. For example, it your benefit at full retirement age would be $2,000, your spouse could get as much as $1,000 based on your work record.
If you decide to opt for the spousal benefit but have not yet reached full retirement age yourself, that benefit will be reduced to as little as 32.5% of the worker’s PIA, according to the Social Security Administration Take the time to research how much your estimated benefits would be at full retirement age so you can make a comparison.
Couples who wait until the higher earning spouses max their benefits at age 70 could be making a big financial mistake, according to Gordon.
“Yes, he gets more, but his wife is blocked from getting half of his amount,” she said. “Dollar for dollar, it is often more beneficial for him to draw [at] his [full retirement age] and his wife to do the same. This generation of retirees has a lot of stay-at-home mothers who can only draw if their spouse draws, since they didn’t pay into SS long enough to draw on their own.”
When it comes to spousal benefits, other Social Security experts agree with Gordon.
“For most retirees, delaying the withdrawal of spousal Social Security benefits can lead to significant financial disadvantage and, for many, it’s an outright scam,” Liam Hunt, financial writer and analyst for GoldIRAGuide.org, told Newsweek. “Unlike individual Social Security benefits, which continue to grow each year you delay until age 70, spousal benefits do not increase in the same manner.”
With spousal benefits, there’s no real financial advantage to waiting past full retirement age to collect.
“You’re basically leaving money on the table,” Jeff Rose, CFP, CEO and founder of GoodFinancialCents.com, told Newsweek. “It’s like not cashing a check that’s already in your name. The most you can get as a spouse is 50% of your partner’s full benefit, and that percentage doesn’t grow if you delay past the full retirement age.”
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