Think Claiming Social Security at 70 Is Your Safest Bet? Here's Why That Decision Could Backfire

It’s in your best interest to retire with some amount of money saved up. If you let yourself retire on Social Security alone, you might end up having a hard time covering your expenses. But if you’re getting closer to retirement and you aren’t happy with the amount of money you’ve saved to date, you may be inclined to delay your Social Security claim until age 70.

If you were born in 1960 or later, you can collect your complete monthly Social Security benefit without a reduction at 67, which is full retirement age. You can also sign up sooner — as early as age 62. But for each month you claim Social Security before full retirement age, your benefits get reduced.

Delaying Social Security past full retirement age, on the other hand, gives your benefits an 8% boost per year until you turn 70. So it’s a great way to score a guaranteed higher payday.

But despite that upside, claiming Social Security at 70 could be more risky than you’d think. Here’s why.

You’re taking a risk on lifetime income

There’s no question that you’ll get the largest monthly benefit possible by claiming Social Security at 70. But it’s definitely not a given that you’ll get the largest lifetime benefit by delaying your claim until 70.

Remember, when you delay Social Security until 70, you’re giving up a large number of individual payments in exchange for the promise of more money each month. This means you need to live long enough for that decision to pay off.

If your full retirement age is 67 and you’re tempted to delay Social Security until age 70, your break-even age will be 82 and 1/2. That’s the age at which you’d get the same total payout regardless of claiming at 67 versus 70. And if you live beyond 82 and 1/2, that’s when a delayed filing pays off.

But can you be certain you’ll live that long? No. Nobody can.

You could be in great health as of your mid- or late 60s only to take a turn for the worse a few years later. So you need to know that pretty much no matter what your situation entails, if you delay Social Security until age 70, you’re taking a gamble on lifetime income.

Think about what delaying Social Security forces you to give up

There’s another aspect of your Social Security filing decision to think about, too. Even if you do live long enough for a claim at age 70 to give you more lifetime income, what will waiting that long mean for you?

Will it mean having to suffer at a terrible job a few extra years after decades in the labor force, to the point where it impacts your health? Will it mean delaying things like getting to travel — and possibly risking being unable to enjoy those experiences because you waited too long and your mobility declined in the interim?

These are important aspects of the decision to think about. So before you settle on 70 as your optimal Social Security filing age, consider not only the risks, but the things you might be giving up. You may come to the conclusion that signing up for benefits sooner makes a lot more sense.