Filing Early for Social Security: When it Makes Sense

It’s fairly common advice spread by financial advisors and laymen alike: It’s always better to file for Social Security later rather than earlier. After all, by delaying taking benefits, payments can go up significantly.

Chances are that the advantage of delaying taking benefits will apply (and appeal) to most people. Filing earlier (or as soon as one is eligible) can be the right choice many people. Here are some situations when that's true. (For more, see: 4 Unusual Ways to Boost Social Security Benefits.)

  • You want to retire now: While some people choose to delay receiving Social Security until they hit age 70, others want to enjoy their retirement years immediately. Unless you have other forms of income, filing for Social Security is the only way you’ll survive without a steady job. Try to wait until your full retirement age, usually 66 or 67 (click here to find yours). Taking it before then will lower your monthly benefit.

  • You’re in poor health: Though life expectancy continues to rise in this country, many seniors still worry about dying early. If you have a chronic condition or a terminal illness, you might consider taking your benefits early. “Delaying benefits doesn’t make sense if there is a good chance you won’t be around to enjoy it,” said CFP Jennifer Davis of Halpern Financial.

  • You have dependents: If you have children who qualify as dependents, they may receive benefits when you take Social Security. The math might work out in their – and your – favor. The details can be confusing for the layperson, so consult an advisor if you’re unsure.

  • You’re divorced or have a deceased spouse: Filing early can make financial sense for those who are divorced, but were married at least 10 years, as well as those who’ve lost a partner. The survivor benefits can be a great boon, especially for a single senior. Each person can claim one benefit (their own or their spouse’s) at a time and wait to take the other benefit later.

  • Your spouse can take benefits later: If you’re still married, you may only need to take one person’s Social Security benefits early. This strategy can give you some income immediately while the other person’s benefits continue to grow. Make sure to do the math with the official Social Security calculator.

  • You have no other assets: Some people only use Social Security to supplement their income. For others, it’s their only source of income in retirement. If you’re laid off or find your job too difficult to maintain, it may be easier to retire and take your benefits early. While the spend-now/worry-about-it-later mentality is typically toxic when it comes to personal finance, it can be the only option for those of us struggling financially in older age.

The Bottom Line

The common advice still holds true for many, so don’t automatically assume that filing early for Social Security is a good idea. “It’s important to avoid the temptation to take Social Security early just because it’s available,” Davis said. “It may be the only steady source of income (that grows with the cost of living) an individual has.” If you’re not certain how applicable your situation is, consult an advisor. (For more, see: 5 Social Security Changes to Expect This Year and Social Security File and Suspend to End: How to Adjust.)