Why High Earners Should Consider Delaying Social Security
Waiting to claim Social Security can pay off big for high earners. Here's the tradeable logic behind the delay strategy.
If you're a high earner eyeing your Social Security claim date, patience might be your best financial move. Delaying benefits past your full retirement age boosts your monthly check by roughly 8% for every year you wait — up to age 70. That's a guaranteed, inflation-adjusted return you won't find in most bond portfolios right now.
Here's the angle most people miss: in many states, Social Security benefits are completely exempt from state income tax. That means the longer you delay and the larger your eventual benefit, the more tax-advantaged income you're stacking. For high earners already sitting in top federal brackets, that state-level exemption is real money left on the table if you claim early.
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The break-even math matters too. If you delay from 62 to 70, you're betting you live long enough to recoup those missed years of payments. For high earners who typically have better access to healthcare and longer life expectancies, that bet often wins. Run your own numbers, but the actuarial odds tend to favor the wait.
There's also a spousal benefit angle. Your delay doesn't just juice your own check — it can significantly increase the survivor benefit your partner collects if you die first. For dual-income households, that's a portfolio-level risk management decision, not just a personal one.
Bottom line: if you have other assets to draw from in your early 60s — taxable accounts, a Roth, rental income — letting Social Security ride until 70 is one of the cleanest, lowest-risk wealth moves available to high earners. Continue reading at MarketWatch.com
