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Does it Make Sense to Wait Until 70 to Claim Social Security Benefits?

March 8, 2024 • | Curran Estate & Elder Law, PLLC
Delaying benefits provides a bigger Social Security check. However, you have to live long enough to make it worthwhile.

There is no lack of advice about when retirees should start claiming their Social Security benefits. Much of it repeats the adage to wait until age 70 if possible, and the reasoning is not wrong. The longer you delay taking benefits, the higher your monthly benefits will be. The odds are good that you will maximize your lifetime benefits, explains a recent article from The Motley Fool, “The Unfortunate Truth About Claiming Society Security at Age 70.”

However, there are some downsides to waiting until age 70.

Waiting to take benefits until age 70 means you are not claiming earlier, which means you are forgoing as many as eight years of benefits. The CDC says the average 62-year-old will live long enough to take home more lifetime benefits if they delay. However, this is just an average.

A 2019 study from United Income found that 57% of retirees would have maxed out their retirement wealth by waiting to claim until age 70, but this also means 43%—nearly half—would not.

There is no way to know if you would fall into the 57% or 43% categories. You may not want to wait if you have a health condition and a lowered life expectancy. However, at some point, you will need to make a decision.

If your spouse earned far less than you, they might be able to claim a higher benefit on your earnings record than if they claim on their own. Social Security spousal benefits allow spouses to collect up to half the amount their partner will receive at their full retirement age. This could add a significant boost to your household income in retirement. However, there is a catch:  Both spouses must actively collect Social Security benefits.

Unlike personal retirement benefits, spousal benefits max out at full retirement age. If you are waiting to claim your benefits, but your spouse has already reached full retirement age, they may be collecting a smaller benefit than they could if you were also taking them.

Coordinating Social Security claiming strategies with your spouse can be tricky and require complex calculations. Including this discussion with your estate planning attorney will be helpful when creating an estate plan, planning for taxes and passing assets to the next generation.

When you delay taking Social Security benefits, you may rely more heavily on retirement accounts to support your lifestyle in your 60s. Yes, your Social Security annuity will increase while you delay. However, it has no residual value after you pass. In other words, once you die, the value of your Social Security is zero, with the potential exception of survivor benefits for your spouse.

You might decide to collect early instead, hoping your investments will grow faster than the Social Security increase. Collecting early may help you delay taking money from your retirement accounts before turning 70.

Social Security offers a guaranteed inflation-adjusted increase in your monthly benefit when you delay taking benefits. Collecting earlier and keeping more money in markets is an option. Howe  ver, it may not always work to your advantage. If you’re concerned about not having enough money for your later years, deciding when to take your benefits needs serious consideration.

Reference: The Motley Fool (Feb. 10, 2024) “The Unfortunate Truth About Claiming Society Security at Age 70”

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