The No. 1 Reason to Claim Social Security at Age 70

Waiting until 70 to claim Social Security benefits is widely lauded as a smart move for those who can afford it. This can be especially difficult if you’re more than ready to retire at 62 or if you don’t have huge personal savings to fall back on. Still, for those who can stick it out another eight years, waiting until 70 to file for benefits can have a big effect on the total amount you collect in retirement.

Here, we’ll drive home the No. 1 reason it makes sense to wait until 70 to start Social Security.

You’ll get more — a lot more

By far the most important reason to wait until 70 to start collecting Social Security is that you’ll lock in a higher monthly payout for the rest of your life. If you can manage to delay filing your claim beyond full retirement age (“FRA”) — which is usually 66 or 67 — you’ll receive an additional 8% in benefits for every year you wait. At age 70, the compounded value of these increases will be at their highest point.

In all, you’ll likely receive anywhere from 24% to 32% more above what you’d get at FRA if you’re able to wait until age 70 to start collecting Social Security. This matters for a few reasons. First, collecting more helps establish a minimum spending floor in retirement, which can be used to cover fixed expenses like rent, food, or unreimbursed medical costs. Second, all future cost-of-living-adjustments (COLAs) will be based off a higher number, and therefore all future increases will be higher in dollar terms.

Obviously, your remaining life expectancy will also be shorter at age 70 than it was at 62. But if you’re in reasonably good health and have the savings to carry you from age 62 to age 70, it can definitely pay to wait. For most people, if you expect to live until at least your mid-70s, waiting on Social Security can make a lot of sense.

Alternative scenarios to consider

Waiting until age 70 to take Social Security isn’t foolproof by any stretch. Any combination of the below scenarios can throw a wrench into your retirement plan:

You’re in poor health: If for any reason you have a life expectancy that’s below average for someone your age, you might consider taking Social Security as soon as possible.
You need the money: Waiting until 70 to take Social Security is a privilege, and usually the result of diligent saving over the years. You’ll need income replacement in the years between 62 and 70 to cover basic living expenses, and if you’re not still working, your personal savings will need to bridge the gap. If you otherwise need the money, taking Social Security at younger than 70 will be necessary.
You want the money: You might be fine with taking the money to which you’re entitled as soon as you can. You don’t need to provide an explanation, and in the end, it’s your money. Realize, however, that taking Social Security before FRA can result in a substantially lower benefit.

Wait to claim if you can

Few competitive options exist in the marketplace that provide an inflation-adjusted monthly payout for the rest of your life. Social Security has been, and will continue to be, the linchpin for most retirees’ income, and it’s of course in your best interest to maximize it to the extent possible.

The numbers don’t lie: The longer you wait, the more money you’ll ultimately collect. But the decision to take Social Security is more complicated than waiting for the highest payout. Make sure to consult with your family and/or a trusted financial planner before making a final call.

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