By Globalfinserve Business Desk
March 28, 2025
The concept of working longer to maximize Social Security benefits is widely promoted as a sound retirement strategy. Financial advisors frequently recommend delaying benefit claims until age 70 to secure the highest possible monthly payout, which can be up to 32% higher than claiming at full retirement age (67).
However, recent research and Social Security Administration (SSA) data reveal that working longer is not a viable option for most American workers. Health issues, age discrimination, and caregiving responsibilities often make it impossible for individuals to remain in the workforce until their late 60s or 70s.
✅ Key Findings on Social Security and Working Longer
- Few Workers Delay Until Age 70:
- While nearly 13% of workers nearing retirement intend to wait until age 70 to claim the maximum Social Security payout, only 5% actually do.
- The majority of Americans claim benefits much earlier, with one-quarter of men and one-third of women opting to collect at age 62—the earliest eligibility age.
- Health and Mortality Risks:
- The SSA estimates that more than one in eight of today’s 20-year-olds will die before reaching age 67, making the benefit-maximization strategy risky for some.
- Financial Incentive to Delay:
- Delaying Social Security benefits from 67 to 70 adds 8% to the benefit amount each year.
- This translates to a 32% higher monthly payout—a significant boost, especially considering cost-of-living adjustments (COLAs) increase the benefit over time.
- Challenges in Working Longer:
- Age discrimination, health issues, and family caregiving responsibilities often force individuals into early retirement, making it difficult to implement the “work longer” strategy.
✅ The Financial Rationale for Delaying Social Security
On paper, delaying Social Security benefits makes perfect sense.
- By waiting until age 70, retirees can secure a substantially larger monthly benefit, which continues to grow through inflation-adjusted COLAs.
- This strategy is particularly beneficial for individuals in good health with longer life expectancies, as they can maximize their lifetime benefit payouts.
1. Social Security Payout Growth with Age
- Claiming at 62: Workers receive 75% of their full retirement benefit.
- Claiming at 67 (Full Retirement Age): Workers receive 100% of their benefit.
- Claiming at 70: Workers receive 132% of their full retirement benefit, thanks to the 8% annual increase between 67 and 70.
For example:
- A worker entitled to $2,000 monthly at age 67 would receive:
- $1,500 at age 62 (75% of benefit).
- $2,000 at age 67.
- $2,640 at age 70 (132% of benefit).
✅ The Harsh Reality: Most Workers Can’t Afford to Delay
While delaying Social Security makes financial sense, real-life challenges make it impractical for many.
1. Health Challenges
- According to a 2022 National Bureau of Economic Research (NBER) report, chronic health issues force many individuals into early retirement.
- By their early 60s, many workers experience physical limitations that make continuing employment difficult or impossible.
2. Age Discrimination in the Workforce
- Older workers face higher unemployment rates and longer job search periods compared to their younger counterparts.
- According to a 2023 AARP report, two out of three workers aged 50+ reported experiencing age-related discrimination.
- This makes it harder for older individuals to find or retain jobs, forcing them into early benefit claims.
3. Caregiving Responsibilities
- Many older workers are also caregivers for aging parents or spouses, which limits their ability to remain employed.
- Caregiving demands often result in early retirement, reducing the possibility of delaying Social Security benefits.
✅ Social Security Claiming Trends: What the Data Reveals
The Social Security Administration (SSA) statistics highlight the reality of early claims:
- 31% of women and 25% of men claim benefits at age 62.
- Only 5% of retirees wait until age 70, despite the significant financial advantage.
- Nearly 40% of retirees claim benefits before full retirement age (67).
These figures indicate that most Americans cannot afford to wait, either due to financial constraints or workforce challenges.
✅ Alternative Strategies for Retirement Planning
Since working longer is not always feasible, alternative strategies can help retirees maximize their income:
1. Boosting Retirement Savings
- Increasing 401(k) or IRA contributions can help retirees accumulate larger nest eggs, reducing their reliance on early Social Security claims.
- Catch-up contributions for individuals over 50 allow for larger tax-advantaged savings.
2. Reducing Expenses and Debt
- Lowering housing costs (downsizing or refinancing) and reducing discretionary spending can help retirees stretch their retirement income.
- Paying off high-interest debt before retirement reduces financial pressure.
3. Part-Time Work or Consulting
- Retirees unable to continue full-time employment can consider part-time work or consulting to supplement income.
- This strategy allows them to delay claiming Social Security while maintaining some cash flow.
✅ Impact of COLA on Delayed Benefits
One advantage of delaying Social Security benefits is that it results in higher future COLAs.
- COLAs are based on the current benefit amount, so delaying claims results in larger annual inflation adjustments.
- This creates greater long-term income stability.
✅ The Takeaway: Delaying Is Ideal but Impractical for Most
While delaying Social Security until age 70 offers higher benefits, it is unrealistic for many Americans due to health issues, caregiving responsibilities, and age discrimination.
- Only 5% of retirees successfully wait until age 70, despite the financial advantages.
- Most claim benefits early, sacrificing long-term income stability.
✅ Key Recommendations for Retirement Planning
- Assess your health and job stability: Determine if you are physically and financially capable of working longer.
- Consider alternative income sources: Explore part-time work or consulting to delay Social Security claims.
- Engage a financial advisor: Consult with a fiduciary advisor to create a comprehensive retirement plan that balances income needs and benefit maximization.
✅ Conclusion
The concept of working longer to maximize Social Security benefits makes sense on paper but is often impractical in reality.
- Health issues, caregiving responsibilities, and age discrimination frequently force individuals into early benefit claims.
- While waiting until age 70 offers a 32% higher payout, only 5% of retirees successfully delay their claims.
To ensure financial stability in retirement, individuals must consider alternative strategies such as boosting savings, reducing expenses, and consulting financial advisors.
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