Age 70 is far from the most popular to sign up for Social Security. In fact, seniors most commonly claim benefits at 62 because that’s the earliest age they can file.
Signing up at full retirement age, or FRA — which is age 66, 67, or somewhere in between — is another common choice. But many seniors don’t want to wait until their 70th birthday to start collecting benefits.
There’s an upside to holding off on filing for Social Security until the age of 70. For each year you delay your claim beyond FRA, your benefits grow 8%.
Once you turn 70, your benefits can’t increase. But if your FRA is 67 and you file at 70, you’ll score a monthly paycheck that’s 24% higher — for life.
Still, despite the upside of delaying your filing until age 70, you may want to claim Social Security at an earlier age. Here’s why signing up at 70 could actually backfire on you.
1. You may not live long enough to enjoy a higher lifetime benefit
While delaying your filing until age 70 might give you a higher monthly Social Security benefit, it won’t necessarily give you a higher lifetime benefit. And it’s the latter you should be focusing on.
Say you’re entitled to $1,550 a month at an FRA of 67. If you delay your filing until age 70, your monthly benefit will increase to $1,922.
That’s a nice boost. But if you live until age 82 1/2, you’ll break even under both filing scenarios. And if you don’t live until at least 82 1/2, you’ll end up with a lower lifetime benefit by virtue of delaying your filing until age 70.
2. You might miss out on an early retirement
Some people work hard all their lives in the hopes of leaving the workforce in their early or even mid-60s. But if you force yourself to delay your Social Security claim until age 70, you might have to delay your workforce exit, as well. That could mean having to plug away at a job for longer when you’ve earned that earlier escape.
Not only might working longer make you unhappy, but it could also harm your health. This especially holds true if your job is stressful or very strenuous in nature.
3. You might delay the start of a lucrative venture
Many seniors use retirement as an opportunity to start a business. And if you’re planning to do the same, filing for Social Security at 70 could be a mistake.
It takes money to get a business off the ground, and your Social Security benefits could be that seed money. But if you wait to file, you’ll also lose out on several years of being able to build and grow that business — not to mention the revenue it might have otherwise generated.
Should you claim benefits at age 70?
To be clear, in some cases, filing for Social Security at 70 is a very smart move. If your health is great going into retirement, you might live long enough to come out ahead financially in that filing scenario. And if you were unable to save for retirement during your working years, delaying your claim to grow your monthly benefits is a good way to compromise.
But claiming Social Security at 70 isn’t the right choice for everyone. You may want to consider signing up long before age 70, depending on your personal circumstances.
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