Key Points
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Claiming Social Security at 70 could boost your monthly benefits for life.
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Many people can’t delay their benefits that long unless they’re working.
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Don’t assume you’ll remain gainfully employed through your 70th birthday.
The nice thing about Social Security is that you get a choice as to when to sign up for benefits. The earliest age to file for Social Security is 62. But from that point onward, you can claim benefits whenever you want.
Many people aim to wait until full retirement age to sign up for Social Security to avoid a reduction in benefits. Full retirement age is 67 if you were born in 1960 or later.
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However, there’s a lot of upside to waiting beyond full retirement age to claim Social Security. For each year you hold off, you accrue delayed retirement credits that are worth an 8% boost to your monthly checks.
Once you turn 70, those credits stop adding up. So there’s no sense in delaying Social Security beyond your 70th birthday. However, you may be planning to claim Social Security at 70 to score the maximum monthly paycheck you can based on your personal wage history.
It’s certainly not a bad plan in theory. But you should know that in practice, it may not quite work out.
Why you may not get to claim Social Security at 70
Some people are able to delay Social Security because they have a ton of savings to live on while they wait to file. But for many people, the ability to sign up for Social Security benefits at age 70 hinges on being able to work until 70. And there’s unfortunately no guarantee that you’ll be able to do that.
Even if you’re the type of person who’s willing to hustle, the reality is that changes to your industry could leave you out of a job sooner than expected. We don’t know to what extent AI will be a disruptor. And sadly, even if you’re great at what you do, companies sometime have a tendency to push older workers out, even though it’s illegal to do so.
Then there’s your energy level to think about. If you’re in your 40s or 50s now, you might assume that you’ll be able to keep doing what you’re doing until age 70. But even if you work a desk job, you may not have the stamina for the daily commute and stress in your late 60s like you do today.
Also, you never know when actual health issues might force you to retire sooner than planned. And those health issues don’t have to be yours. They could be a spouse’s or an aging parent’s.
Make sure you have a backup plan in place
There’s nothing wrong with planning to sign up for Social Security at 70 for boosted benefits. But you also can’t assume you’re going to be able to wait that long and snag those larger monthly checks.
For this reason, it’s important to start saving for retirement as early as possible. And also, aim to increase your contributions to your IRA or 401(k) plan as best as you can from one year to the next. The more of a nest egg you manage to build, the less of a blow it will be if you end up having to claim Social Security prior to 70, resulting in smaller monthly checks.
In fact, not only might you find yourself unable to wait until 70 to claim Social Security, but you may even end up having to take benefits early. So it’s best to have a nice amount of savings at your disposal in case your claiming strategy doesn’t pan out due to circumstances that may be outside your control.
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