Be Careful Claiming Social Security at 70. The Math Won't Always Work Out in Your Favor.

Signing up for Social Security is one of the most important retirement decisions you might make. While your monthly benefit is based on your personal wage history, your filing age also plays a role in how much money Social Security pays you.

Your retirement benefit is yours without a reduction at full retirement age, which is 67 if you were born in 1960 or later. But you can claim Social Security as early as age 62 or delay your claim past full retirement age for boosted checks.

Each year you wait beyond full retirement age, until you turn 70, your benefits grow 8%. File at 70, and you could be sitting on a permanent 24% increase.

That might sound enticing. But here’s why filing for Social Security at 70 isn’t guaranteed to be a smart move.

You need to make up for missing checks

While claiming Social Security at 70 results in larger benefits, it also means missing out on years of collecting those payments. If you don’t live long enough to recoup those missed benefits, you could lose out financially by waiting until 70.

In fact, your break-even age between claiming Social Security at 67 versus 70 is 82 1/2. At that point, you get the same total from Social Security in either filing scenario.

What this means, though, is that claiming Social Security at 70 doesn’t make sense unless you’re super confident you’ll live until 82 and 1/2. If you pass away in your late 70s, for example, you’ll short yourself on lifetime Social Security income.

Say your benefit at full retirement age is $2,500. Waiting until 70 gives you $3,100 a month instead. At age 82 and 1/2, you’ll have collected $465,000 in Social Security in either claiming scenario.

If you file for Social Security at 70 but only live until age 79, it’ll cost you $25,200 in benefits based on the numbers we’re using in this example. And while those numbers may not match your benefit, the point is that filing at 70 isn’t universally the best choice, despite the guaranteed boost.

Think through your choices carefully

It’s easy to look at your Social Security filing choices and think larger monthly benefits are the way to go. In reality, you might regret that choice if your health starts to fail in your mid-70s and you realize you may not get to recoup those years of missing checks.

That’s why it’s important to consider your options carefully. If your health is in great shape and your parents are still alive in their 90s, a delayed claim could pay off. Otherwise, you may want to think about signing up at full retirement age.

And if you’re not confident in your own longevity, claiming early is an option worth looking at, too, despite the automatic reduction in benefits it leads to.