Everyone Tells You to Claim Social Security at 70 But This May Be a Bad Deal For You

One big myth about Social Security is that once you reach a certain age, you get enrolled to take benefits automatically. The truth is that if you don’t actively sign up for Social Security, you won’t get benefits, even if you worked and paid into the system long enough to qualify.

Not only do you have to actively sign up for Social Security to get benefits, but you also have to choose your own filing age.

You can claim benefits starting at age 62. But full retirement age (FRA) is when you can collect your monthly benefits without a reduction. FRA is 67 if you were born in 1960 or later.

There’s also an option to delay Social Security past FRA for boosted benefits. Your benefits will increase 8% for each year you hold off, until you reach the age of 70.

A lot of people think filing for Social Security at 70 is the best decision since it results in the largest monthly paychecks. But while claiming Social Security at 70 might work out for some people, it could end up being a bad deal for you.

Don’t cheat yourself out of money

You might assume that claiming Social Security at 70 will give you the most amount of money. That may or may not end up being true.

Filing for benefits at 70 means getting more money from Social Security each month. But it doesn’t guarantee more money in your lifetime.

Here’s an example to illustrate this point. If your monthly Social Security benefit at 67 is $1,800, claiming at 70 will give you $2,232 per month instead.

But if you only live until age 72, you’re getting $2,232 a month for just 24 months total. That’s $53,568 in Social Security as a lifetime payout.

Had you taken your $1,800 a month at 67, by age 72, you’d have $108,000, or twice as much money.

What this shows us is that claiming Social Security at 70 really only pays off if you end up living a long life. If you pass away at a fairly young age, you could end up denying yourself income.

Here’s the problem, of course. You don’t know how long you’ll live. That’s impossible. So what you really need to do is ask yourself whether you’re willing to take that chance.

Questions to ask yourself before delaying Social Security

There’s a clear upside to holding off on Social Security until age 70. But if you’re thinking of doing this, ask yourself these questions:

• Is my health in good shape?
• Did my parents live long lives?
• Can I afford to retire without boosting my Social Security checks?
• Is there something meaningful the extra money can do for me?
• Do I want to keep working or stop?

Going through all of these questions could help you decide on a Social Security filing age in general. But the first three in particular are helpful in determining whether you should claim Social Security at 70 versus file sooner.

Remember, claiming Social Security at 70 could work out for you financially, but there’s no guarantee. If you’d rather not take the chance, that’s reason alone to claim benefits at an earlier age.

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