But here’s another scenario when delaying benefits really isn’t wise, and it’s when your health is poor. Social Security is technically designed to pay you the same lifetime total regardless of when you initially claim benefits. The logic is that while delaying benefits will result in higher monthly payments, you’ll collect a smaller number of payments. Things should even out if you live an average lifespan. But if you don’t, and you pass away sooner than the typical senior, you’ll probably end up losing out on money in your lifetime by waiting on benefits.
Imagine you’re entitled to $1,500 a month from Social Security at an FRA of 67. Waiting until 70 to file will give you $1,860 a month instead. If you live until 82-1/2, you’ll break even in both filing scenarios — you’ll wind up with a lifetime total of $279,000 by filing at either 67 or 70.
But watch what happens when you only live until age 75, which is roughly 10 years below average life expectancy for the average 65-year-old today: Suddenly, you’re looking at $32,400 less from Social Security in your lifetime by delaying benefits until 70. As such, you must take the state of your health into account when determining when to claim benefits. And if your health is poor, you may need to forgo that higher monthly benefit to help ensure that you get the most money possible all-in.
Delaying Social Security often works out well — who wouldn’t want more money on a monthly basis for life? But before you make plans to delay…