3 Reasons It’s Dumb to Take Social Security Benefits at 70

You can choose to start receiving Social Security benefits at any time between your 62nd and 70th birthdays, and many financial experts emphasize the fact that the longer you wait, the larger your monthly benefit checks will be. But there are still some good reasons why many people shouldn't put off taking their Social Security benefits until they turn 70. Below, you'll find three of them with an explanation about how you can make the best decision for your situation.

Brian Stoffel: While there are lots of good, healthy reasons to wait until 70 to claim your Social Security, a simple boost in cash is hardly enough to justify the decision, in my opinion, especially when you already have enough to live a comfortable lifestyle.

Consider the different possibilities of when you can claim, and how it affects your monthly check from the government.

Source: Social Security Administration. Percentages represent payouts if you start receiving money just after your birthday.

Among Social Security gurus, there's something called the "breakeven age." Here's the thinking behind it: while the person who claims at 62 is getting a monthly check that's almost half of the retiree who waited until 70 to claim, the former is collecting money for a full eight years while the latter isn't.

In other words, the early claimers might be getting less, but they're getting it for a lot longer. Depending on taxes, inflation, investment returns, and a host of other variables, it doesn't become financially advantageous to wait until 70 (versus 66) until a retiree reaches his or her mid-80s.

Given that the life expectancy for a U.S. citizen aged 70 is 15 years for males and 17 years for females, it's virtually a wash. In the end, if you have enough money to make ends meet and enjoy retirement when you're younger, it makes a lot of sense to take it.

Matt Frankel: Brian is 100% correct that theoretically, you'll get the same total amount from Social Security no matter when you decide to start collecting benefits. However, this is based on actuarial formulas, while every person is different.

What I'm getting at is that it's worth assessing your own situation before deciding when you should start receiving Social Security. If you have a family history of longevity and you're in excellent health, it may be to your benefit to wait as long as possible to collect Social Security to take advantage of the higher payments.

On the other hand, if your parents and other family members passed away at a relatively young age, or you're in less-than-stellar health, it's probably in your best interest to start collecting Social Security as soon as possible. For example, if you're a pack-a-day smoker and both of your parents didn't make it past 75, it's probably unwise to wait.

Of course, there are no guarantees when it comes to longevity. People in seemingly poor health live into their 90s, and physically fit people die young. The objective is to look at all of the available information and make the best decision possible for you.

Dan Caplinger: Brian and Matt both note that waiting until 70 can unnecessarily lead you to wait for what will theoretically be the same amount over your lifetime. Yet putting theory aside, there's a common situation in which waiting until 70 to claim benefits is always the wrong move: when you're looking to collect spousal benefits.

The reason people wait to collect their own retirement benefits until age 70 is that they get delayed retirement credits for the years past their full retirement age. That can result in payments that are as much as 32% higher than what they'd receive if they simply took their Social Security benefits at their normal full retirement age.

For spousal benefits, however, no delayed retirement credits are available. If you wait past full retirement age to claim them, you won't get any extra money. You'll just give up benefits that you were otherwise fully entitled to claim, with nothing to show for it.

To be eligible for spousal benefits, your spouse has to claim regular retirement benefits. As soon as you qualify, though, it makes sense to get those spousal benefits started if you're at or beyond your full retirement age.