3 Reasons To Delay Taking Social Security, According to Suze Orman
One of the biggest decisions retirees make is when to file for Social Security benefits. Your decision can make a difference totaling tens of thousands, or even hundreds of thousands, of dollars, depending on how long you live. Most financial experts, including Suze Orman, recommend waiting as long as possible to file for benefits.
Check Out: I Retired at 65 — Here’s My Monthly Budget
For You: One Smart Way To Grow Your Retirement Savings in 2024
The main reason to wait is that the longer you delay filing, the higher your monthly payment. That doesn’t mean you should always wait to collect Social Security. In some cases, you’re better off filing early — especially if you have debt to pay off or suffer from a medical condition that needs immediate attention. Even so, many Americans are hesitant to file for Social Security early because of fears that the program is not on solid financial footing.
In a LinkedIn post last year, Orman cited a survey showing that only 10% of Americans have made plans to receive the biggest possible Social Security payout. That’s the case even though the vast majority of respondents know that waiting as long as possible to file for Social Security — ideally, until age 70 — will ensure the biggest monthly payment.
“What seems to be gnawing most at near-retirees is a fear that the Social Security program is going to run out of money and stop making payments,” Orman wrote.
Orman revisited the topic this month, writing on LinkedIn that the benefit you receive at age 62 — the earliest age you can receive Social Security retirement benefits — will be permanently lower than if you wait.
In most cases, you stand to gain financially the longer you wait. Here are three reasons to delay filing for Social Security benefits, according to Suze Orman.
Sponsored: Credit card debt keeping you up at night? Find out if you can reduce your debt with these 3 steps
The Longer You Wait, the Bigger Your Check
If you’re in good physical health and expect to live a long time in retirement, “there is no better financial move to consider than waiting as long as possible to claim your Social Security benefit,” Orman wrote. “A Social Security payout that will be 76% higher if you wait until age 70 to start can be awfully helpful if you indeed have a longer life.”
Your Older Self Will Thank You
In a recent “Monday Morning with Suze” post, Orman posed the question of which financial steps you can take now “to be kindest” to your future older self.
“Remember, if you make it to 65 in average health there is a good probability you may indeed be alive into (and past) your late 80s,” Orman wrote. “From a financial standpoint, if you do live a long life, waiting as long as possible to start collecting Social Security will pay off with higher lifetime benefits.
Social Security Will Not Run Out of Money
One of the biggest concerns about Social Security is that its Old Age and Survivors Insurance (OASI) Trust Fund is due to run out of money within the next decade. When that happens, the program will lose about 23% to 25% of its current funding. But even when the OASI fund is depleted, payments won’t stop completely, Orman noted.
“Now I am not suggesting a payout of just 75% is acceptable, but 75% is a lot more than zero,” Orman wrote. “So let’s keep that in mind.”
More From GOBankingRates
This article originally appeared on GOBankingRates.com: 3 Reasons To Delay Taking Social Security, According to Suze Orman
