To collect the full Social Security retirement benefit that you’re entitled to, you must wait to claim until you reach your full retirement age, which ranges from 66 to 67, depending on when you were born. But more than half of recipients start earlier and settle for a smaller benefit, often for good reason. 

In his latest answers to reader questions, columnist Phil Moeller, the author of Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs and the co-author of the updated edition of The New York Times bestseller How to Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security, explains why he prefers waiting as long as possible, plus warns of a potential scam. 

Got a question of your own about Medicare or Social Security? Send it to  askphil@considerable.com.

Should I file early or wait until age 70?

Douglas P.: I am 65, and my wife is 62. We both were relatively high earners before our retirements. Although I initially planned for both of us to wait until we are 70 years of age to file for Social Security, I have used two different software packages that suggest that me filing a restricted application (since I was born before 1954) when I turn 66 and my wife filing when she is 63 makes more financial sense. Do you agree?

Phil Moeller: This approach may well be right for you, but I don’t know enough about you to provide an opinion.

How healthy are you and your wife, for example, and how long do you expect to live? Do you need current income to make ends meet, or are you swayed by what these software tools are telling you about maximizing the total stream of income you would receive from Social Security over a certain time frame?

If you were both high earners, then your wife is leaving a lot on the table by filing for her own benefit at age 63—a benefit cut by roughly 60% a month for the rest of her life depending on when she turns 63. You can work out the specifics by looking at how much she would lose due to early filing plus the loss of delayed retirement credits.

The major fork in the road here, as I see it, is whether Social Security benefits are approached on a break-even basis or as a form of gilt-edged longevity insurance. The break-even crowd looks at how much in benefits they give up by waiting to claim and then how long it would take those higher benefits to generate a bigger pool of funds than if they’d been claiming the lower benefit for seven years.

In your case, you would add the four years of spousal benefits to that equation. Doing so can easily move the break-even date to when you’re in your mid-80s—close to your hypothetical life span. Why wait, the break-even folks say?

That’s where the longevity insurance types chime in, “Because one or both of you could live until well into your 90s, and maximizing Social Security is the best form of longevity insurance out there. Benefits are guaranteed by Uncle Sam, indexed for inflation, and taxed at rates lower than ordinary income.”

If I die before my 90s, I’m not going to be around to lament that I should have taken benefits sooner.

I am in the longevity-insurance camp. If I die before my 90s, I’m not going to be around to lament that I should have taken benefits sooner. But if I am around, I will be very happy I waited.

And during all the years between claiming at the end of the line, I will go to sleep at night without worrying that I’ve exposed myself to running short of money in my old age. That’s the head-on-the-pillow test, and it’s really important to me.

Can I get monthly checks thanks to the new tax law?

Christine P: I have been getting notifications for sometime about the possibility of getting monthly Social Security checks through a loophole in the new tax law. I have been unable to get the facts and know how to apply. Do you know anything about that?

Phil Moeller: This sounds like a scam. Social Security does not send out notices like this. What’s more, the agency rarely issues checks and pays nearly all benefits by direct deposit.

If your taxes are reduced because of the new tax law, and you have projected taxes withheld from your monthly Social Security payment, it’s possible your withholding could drop a bit and your benefits would rise. Otherwise, what seems too good to be true usually is!