What Waiting Until 70 To Claim Social Security Can Cost You If You Die at 78

Though you can start collecting Social Security as early as 62, waiting until age 70 lets you maximize your benefit and allows it to reach the highest possible amount.

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According to the SSA, “If you wait until age 70 to start your benefits, your benefit amount will be higher because you will receive delayed retirement credits for each month you delay filing for benefits.”

That said, if you pass away earlier than expected, this strategy can cost you a pretty big amount of money you’ll never get back.

Why Waiting Until 70 Can Be Risky

If your full retirement age is 67, your benefit at that age would be around $2,000 a month. If you wait until 70 to claim, that benefit goes up to around $2,480 per month. However, by delaying your Social Security for three years, you skipped 36 months of payments, which means you’re leaving $72,000 on the table.

Delaying claiming makes more financial sense if you actually live long enough to break even. For most people, that break-even point lands somewhere between ages 78 and 81. If you live past that, delaying was a good idea. If you don’t, you’ve actually lost money.

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How To Calculate Break-Even Age

Here’s an example to help you better understand how to calculate your break-even age.

Let’s say your Social Security benefit is $1,400 a month at 62, and $2,480 a month if you wait until 70. By waiting, you skip 96 months of $1,400 checks. That’s $134,400 you didn’t collect while you were waiting.

Once you start collecting at 70, you’re getting an extra $1,080 a month compared to what you would’ve gotten at 62. So to break even, you’d divide the money you missed by the monthly gain, which is $134,400/$1,080 = 124 months, or 10.3 years. That means your break-even age is 80.3 years old.

So What Happens If You Die at 78?

In this case, if you start claiming your Social Security at 62, you would have collected benefits for 16 years. That comes out to about $268,800 total ($1,400 a month for 192 months). If you waited until 70 to start collecting, you’d only collect for eight years, which is about $238,080 total ($2,480 a month for 96 months). So, in this scenario, claiming Social Security early would actually leave you with $30,000 more over your lifetime.

Now, to be fair, you can’t predict when you’re going to pass away. Delaying to 70 could still make sense if you’re in excellent health or are worried about outliving your savings. But it’s not just about life expectancy. You should also take into consideration your savings, whether you’re still working, and how much income you need when you’re making this decision. Talk to a financial advisor who can help you run the numbers.

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This article originally appeared on GOBankingRates.com: What Waiting Until 70 To Claim Social Security Can Cost You If You Die at 78