Consider These 3 Things Before Taking Social Security Benefits

September 17, 2021 Topic: Social Security Region: Americas Blog Brand: The Reboot Tags: Social SecurityBenefitsSavingsRetirementEconomy

Consider These 3 Things Before Taking Social Security Benefits

If you are strapped for funds, it is important to optimize your Social Security payments.


Here's What You Need to Know: Every American should be able to answer these three questions before claiming their benefits.

Most Americans retire when they reach their mid-sixties. For those who have saved during their lifetimes through regular 401(k) and Roth IRA contributions, they may have already saved a comfortable nest egg; for them, Social Security can act as a useful way to pad their budget. 


Unfortunately, for many retiring Americans, Social Security is their budget. A survey conducted by financial group Vanguard revealed that one-third of all Americans have saved less than $10,000 for retirement. For these people, preparing for an adequate Social Security payment is essential, in addition to saving money while it is still possible to do so. 

For people who are strapped for funds, it is important to optimize one’s Social Security payments. Many Americans do not know how to do this; they simply file for their benefits as quickly as possible, unaware that doing so could cost them thousands in the long run. 

Every American should be able to answer these three questions before claiming their benefits.  

1. What is My Birth Year’s Full Retirement Age? 

Full retirement age (FRA) is a set age at which the Social Security Administration establishes that most people in one’s age cohort have retired. This number will vary depending on what year a person was born. Generally, for Americans born before the year 1960, the age is sixty-six and a certain number of months, depending on the year. For Americans born after the year 1960, the age is sixty-seven—meaning they will not reach their FRA age until 2027 or later.  

A person’s FRA age is important because it determines their base payment, or how much money they will receive if they choose not to cash out early or wait. 

2. How Much More Can Be Earned By Waiting? 

A retiree does not need to file for Social Security at the age of sixty-seven; he or she can wait longer. The key factor is that a person’s total benefit will increase by a certain amount the longer they wait. For instance, at age seventy, the highest possible age, a person with an FRA of sixty-seven could receive a 24 percent increase in their monthly payments—an increase that will cover the cost of waiting if they live into their mid-eighties or beyond. For many who did not save well during their careers, waiting as long as possible to file for Social Security is the most financially sound option.  

3. Can My Spouse Benefit? 

Most spouses can claim a person’s social security payments as a “survivor’s benefit” after that person has passed away. Conceivably, if a person has a younger spouse, it might be a good idea to delay filing as long as possible, ensuring that a younger spouse could continue to collect a larger payment for a long period of time. 

With all of this said, it is not always the best idea to wait as long as possible to claim Social Security. If a person claims their benefits at the age of seventy and dies at seventy-one, then they would have been much better off financially to collect the benefits early. However, if a person is reasonably confident they will live a longer life or if they are expecting a spouse to take over their benefits after their death, it is generally a good idea to wait. 

Trevor Filseth is a current and foreign affairs writer for the National Interest.

This article first appeared in August 2021.

Image: REUTERS/Leah Millis