It’s impossible to get in front of every financial decision your clients make, but on the topic of Social Security, it’s worth stepping in. Only 5% of men and 7% of women wait until age 70 to file for retirement benefits, despite the fact that Social Security generously rewards those who wait until that age.

Undeniably, many people need the benefits in their 60s to pay bills or blunt the effects of inflation. People with shortened life expectancies may choose to claim benefits as soon as possible for obvious reasons.

But those who could delay often don’t. They may be eager to collect from a system they’ve been paying into since their teens or 20s. Or they haven’t evaluated all their options, and by the time they come to you they have already filed for benefits.

Depending on a client’s situation, it might be time for a tough conversation to suggest one or more of these five ways clients could delay filing for Social Security or, if possible, stop or suspend their benefits.

1. Your clients could keep working. Layoffs dominate the news today, but many organizations still can’t find enough qualified workers. Some have woken up to the benefits of retaining experienced employees for their organization’s good.

You might suggest to clients that they don’t leave their current job if they can stay, or that they find a way to semiretire and earn money to bridge the gap until they reach 70. You may have clients who could “unretire.”

An overlooked benefit of working is that clients continue to pay into Social Security and acquire the “credits” that ultimately determine their benefit when they file.

Some work status changes could mean clients lose their employer-sponsored benefits. You’ll need an associate who can help clients with health insurance. Clients who are at least 65 are eligible for Medicare. If under 65, they may be able to buy an individual plan through a state or federal government exchange or be covered as a dependent on a working spouse’s plan.

2. Your clients could wait for Social Security income by turning instead to withdrawals from individual retirement accounts (IRAs), 401(k)s, or other tax-advantaged accounts. Many clients probably thought they’d wait until the age that required minimum withdrawal (RMD) rules say they must begin taking money out. That age was 70½ only a few years ago. But congressional action raised it—first to 72, then to 73 this year, and to 75 in 2033.

However, after age 59½, there is no penalty for tapping an IRA or 401(k). And depending on the balance, clients could use some of their savings to help them delay Social Security.

This is where you prove the value of your advice. By using software that can project Social Security benefits for a client and spouse at different ages and evaluate the tax liabilities of withdrawals, you can look for potential solutions for other income while they wait to file for the benefits.

3. Your clients could turn to income annuities to provide a guaranteed income stream while they wait. There’s been a resurgence of interest in annuities. Companies that issue them have innovated with these products to fit the need of retiring boomers for income stability and volatility hedging in their portfolios.

Annuities are, of course, not guaranteed by the government, and they come with fees. The issuing insurer’s financial stability and the effects of fees on portfolio values are factors to consider when discussing annuities with clients.

4. If widowed or divorced, a client may be able to use a deceased spouse’s benefit and wait to claim theirs. A divorced or widowed client has other options. They may be able to file for a survivor’s benefit based on a departed or ex-spouse’s earnings record and delay filing for their own potentially more significant benefit at 70.

There are eligibility guidelines, of course, so if this isn’t your area of expertise, consult someone who has passed certifying exams in Social Security benefits and who specializes in them.

5. If the client can’t wait until 70, maybe they can at least delay just a little longer. With Social Security, 62 is when a client can file and receive a reduced benefit. Waiting until the next important age—full retirement age—yields a significant benefit. For those who turn 65 this year, the full retirement age is 66 and 8 months. It tops off at 67 for those born in 1960 or later.

Between the full retirement age and age 70, clients earn delayed retirement credits monthly that accumulate at an effective annual rate of 8%. Ask your client, “When was the last time you got a pay raise of 8%?”

A Final Note
You may hear clients express anxiety about the future of Social Security. You’re not a soothsayer, but you can remind them that benefits rise with inflation, and they will profit from those cost-of-living adjustments even while on the sidelines.

You can also assure them that changes to Social Security will not affect anybody who is already eligible for benefits—in other words, those who have turned 62 and were born before 1961.

Finally, wrangling over Social Security funding continues in Washington. President Biden has proposed substantially increasing funding for Social Security. Of course, there’s no predicting what will happen, but history and electoral politics provide some comfort.

Paul R. Samuelson is the chief investment officer and co-founder of LifeYield. Alyson Dorosky, CSSCS, is LifeYield’s head of Social Security support.