Delaying Social Security Can Save Some Couples More Than $100K?

More than ever, due to today’s rate environment, it pays to delay taking social security, according to research by the Boston College Center for Retirement Research and findings of the American Enterprise Institute. 

Contrary to the common thought that regardless of filing age, the same amount will be paid out during retirement, this finding actually shows how today’s low interest rate environment makes it increasingly prudent to delay claiming social security—and it can make a difference of more than $125,000 for married couples. 

The Center for Retirement Research writes about the phenomenon in a blog post this week, sharing data from the American Enterprise Institute that shows a single man will receive the maximum benefit today by filing at age 69. For a single woman, that age is 70, which will result in nearly $60,000 more over the course of her retirement. 


And yet, the average age for starting to claim Social Security is 62, despite the increase presented by waiting. For couples, the discrepancy grows. 

“The two-earner couple gains the most if the husband starts his benefits at age 70 and the wife claims a spousal benefit – based on her husband’s earnings – at age 66 and then, at age 70, claims the benefit from her own employment. Doing so would generate $124,342 more income than if both spouses had claimed Social Security at age 62.”

The explanation has to do with the current interest rate as well as inflation over time. 

“With inflation-adjusted rates currently running at 0 percent – as [the researchers] assumed in their estimates – the dollar next year is worth roughly what it is today,” the CRR writes. “In short, it pays to delay and collect the larger check later, because every dollar in that check has held its value.”

Read the original blog post. 

Written by Elizabeth Ecker

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  • The findings are only as strong as the underlying assumptions and data used in the underlying analysis.  Without that information these findings are interesting but without merit as to application.  

    For example, in analyzing couples were the typical divorce, death, and remarriage rates factored in including the amounts of Social Security new partners bring into the relationship.  Were only married couples analyzed due to the simplicity that concept brings to the equation or were far more complex relationships considered such as unmarrieds living together, domestic partners, and other like relationships where household income is looked at as a single unit.

    Did the study consider the mode age of life expectancy, the simple average or a weighted average of life expectancies?  It would be a very unusual state of affairs if earnings for the average Social Security beneficiary exactly offset the negative impact of inflation.  In fact the average earnings rate of the wealthy on their assets is usually greater than the average earnings rate of the modestly affluent.

    A macro picture is just that.  The macro picture should only provide ideas of what data should be used in analyzing the issues at the micro level.

    One of the worst conclusions in the study is the following:  “In short, it pays to delay and collect the larger check later, because every dollar in that check has held its value.”  And why is that?  If the life expectancy of a prospect is only 5 more years at age 62, should the senior delay the taking of Social Security?  The answer is neither yes nor no.  The trouble is there is simply too little information to reach a reasonable conclusion.  Marital status, inheritance, cash flow without considering Social Security benefits and a myriad of other factors all need to be considered.

    Does the BCCRR article even provide a rule of thumb?  Only as macro discussions.

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