Key takeaways
✔ The longer you delay Social Security, the higher your monthly benefits.
✔ Divorced: Your benefit can be based on your ex-spouse’s work history.
✔ Widowed: Consider claiming survivor’s benefits or your own, and switch later.
✔ Consider all your income sources when making a decision on Social Security.
Figuring out when and how to take Social Security can be a complicated decision, even if you are single. Here are some strategies to consider to help make the most of your Social Security benefits if you’re widowed, divorced, or have never married.
First, some basics
You can start taking Social Security, receiving reduced benefits, when you reach age 62, rather than waiting until your full retirement age (FRA). FRA ranges from 65 to 67, depending on when you were born. (See your full retirement ageOpens in a new window.) If you take benefits before you reach FRA, Social Security will reduce your monthly payments. If you delay collecting until you reach FRA, the amount of your monthly benefit will increase until you reach age 70.
Generally, the longer you delay taking Social Security, the higher your monthly benefits may be, and the gains from waiting can often be significant. Indeed, millions of Americans could help ensure a brighter financial future for themselves simply by hitting the pause button on Social Security for a few years.
Of course, if you wait to collect, you may not live long enough to enjoy the added value of increased payments. Because none of us knows when we will die, you need to make some reasonable assumptions about your life span, based on your health and family history. To help you estimate when you may break even, use the Social Security Administration Retirement EstimatorOpens in a new window.
Tip: To learn about trends in aging and people living longer, read Viewpoints: "Longevity and retirement"
If you are single
Some people want to retire as soon as they can for health reasons. But if you don't need to, consider what you may be giving up if you take Social Security at age 62. Taking benefits before your FRA can cost you now and in the future.
Consider the following hypothetical example. Colleen’s FRA is 66. If she starts taking benefits at age 62, she will get $1,500 a month. If she waits until she is 66 (her FRA) to collect, she will receive 33% more, or $2,000 a month. If she waits until age 70, her benefits will increase another 32%, to $2,640 a month.1 And if she were to live to age 89, her lifetime benefits would be about $47,000, or 13%, greater than if she had waited until age 70 to collect benefits.2 (Note: All figures are in today’s dollars and before tax; the actual benefit would be adjusted for inflation and would possibly be subject to income tax.)
But that is only part of the story. If you are working, you don’t have to live on your savings. And if you stop working full time and leave a job with good pay and benefits, it may be difficult to ever regain that level of compensation if you need to return to work later. Also, as you approach retirement, you’re often at the peak of your earnings and your ability to build retirement savings. Keep working and you can make “catch-up” contributions to tax-deferred workplace savings plans. Catch-up contributions enable you to set aside larger amounts of money for retirement. For example, the limit on pretax contributions to 401(k) plans is $18,000 in 2016-2017, but if you are age 50 or older, you can invest an additional $6,000 each year. Note: These amounts are subject to cost-of-living adjustments (COLAs).
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