Retirees may benefit from postponing Social Security benefits until 2026 due to higher eventual payouts, improved inflation protection, and enhanced spousal coordination. The decision could boost lifetime income by up to 24% for those born in 1960 or later.
- Benefits increase by 8% per year for each year delayed past FRA, up to age 70
- Projected COLA increases of 3.2%–5.0% between 2025 and 2026 boost real income
- A $2,500 PIA can grow to $3,100 by age 70 with delayed claiming
- Spousal coordination in 2026 can raise survivor benefits by up to 16%
- Delayed claiming may sustain higher household savings and reduce early consumption
- Impact on consumer staples and financial services is indirect and long-term
For individuals nearing retirement, the choice of when to claim Social Security benefits can significantly impact long-term financial security. Claiming in 2026—rather than at full retirement age (FRA) in 2025—offers strategic advantages for those born between 1960 and 1962. By delaying benefits, individuals can increase their monthly payments by 8% per year for each year past FRA, up to age 70. This results in a potential maximum increase of 24% for those who wait until age 70. The 2026 claiming window aligns with projected cost-of-living adjustments (COLA), which are expected to rise due to sustained inflation pressures. Historical data suggests COLA increases in the range of 3.2% to 5.0% over the next two years, directly boosting monthly benefit values. For example, a worker with a primary insurance amount (PIA) of $2,500 could see their benefit grow to approximately $3,100 by 2026 if delayed to age 70. Additionally, timing claims in 2026 enables better coordination between spouses. Couples where one partner has a significantly higher PIA may maximize household income by staggering claims. For instance, a higher earner delaying until 2026 while the lower earner claims earlier at 62 can increase survivor benefits by up to 16% over a lifetime. This strategy supports long-term financial resilience, especially in households with dependent spouses or caregiving responsibilities. The broader financial impact includes delayed consumer spending, which may influence sectors such as consumer staples and financial services. With fewer retirees drawing benefits early, household savings rates may remain elevated, supporting capital markets. However, this effect is gradual and driven by individual behavior rather than macroeconomic policy.