Should You Claim Social Security at 70? Probably Not

When should you start collecting your Social Security benefits? Well, you can do so as early as age 62 and as late as 70. There are upsides and downsides to starting early or late.

Here's why it might be worth passing up the advantages of starting late and instead claiming your benefits at 62 or 63.

Image source: Getty Images.

Social Security basics

First, let's see why many people would want to delay starting to collect their benefits. The table below shows the approximate percentage of your full benefits that you'll get if you start collecting at various ages.

Source: Social Security Administration. 

Do you expect to receive about $2,000 a month if you start collecting at your full retirement age (which is 66 or 67 for most of us)? Well, per the table above, if your full retirement age is 67 and you wait until 70, you'll receive checks that are 124% of $2,000 -- or $2,480. Over a year, that's $5,760 more, a meaningful sum. That extra money is a bit misleading, though, as you'll see shortly.

Note, too, that you can visit the My Social Security site to find out just what benefits you can expect.

Yes, bigger checks -- but fewer of them

It's true that your Social Security checks will get bigger if you delay starting to collect them. And it's also true that if you start collecting before your full retirement age, they'll get smaller -- up to 30% smaller.

That probably seems like reason enough to delay as long as possible. But for most of us, waiting is probably not worth it.

The Social Security Administration explains why, saying, "If you live to the average life expectancy for someone your age, you will receive about the same amount in lifetime benefits no matter whether you choose to start receiving benefits at age 62, full retirement age, age 70, or any age in between."

After all, while checks that start arriving at age 62 will be considerably smaller, you'll receive many more of them. Starting at age 62 instead of 67 means 60 additional checks. And starting at 62 instead of 70 means 96 additional checks. So starting to collect at 70 doesn't offer most of us the windfall that it may seem to.

Image source: Getty Images.

Life throws curveballs

It's dangerous to plan on working until age 70 and start collecting bigger Social Security checks then, because life often throws us curveballs. A heck of a lot of people don't end up getting to choose when to retire.

Fully 48% of retirees left the workforce earlier than planned, per the 2017 Retirement Confidence Survey, with 41% of them citing health problems or a disability as the reason; 26% citing changes at work, such as a downsizing or workplace closure; and 14% having to care for a spouse, or other family member.

That should be a wake-up call to save and invest enough so that you can retire early if you have to. Or at least to get as close as possible to that. It's also helpful to get and stay as healthy as possible, to reduce the odds of health problems making you retire earlier than you want.

So, can you retire early?

OK, not everyone can retire early. But you may be able to, especially if you still are a decade or two away and can sock money away aggressively. That's another good reason to not start collecting Social Security at 70.

Here's how much you might amass if you have from three to 25 years before you aim to retire:

Source: Calculations by author.

If you hadn't thought about retiring early as an achievable goal, think about it now. The sooner you retire, the sooner you can get to all kinds of things that you've postponed until retirement, such as leisurely road trips, taking on a new hobby such as woodworking or flying, or establishing that garden you've long dreamed of. Early retirees often can enjoy retirement more, as they're younger, typically in better health than they'll be later, and therefore more able to travel, engage in recreational activities, and so on.

On the other hand...

So for many of us, it's clearly best to aim for a retirement that's as early as possible, and to not plan to start taking Social Security at 70.

Still, it can make sense to wait until 70 for some of us. If, for example, you can afford to wait -- maybe because you're healthy, you enjoy your job, and you'd like to keep working as long as possible -- go ahead. Another good reason: if many of your relatives have lived to 90 and beyond, suggesting that you stand a good chance of doing so as well. In that case, you can end up getting more out of the Social Security program by waiting for those bigger checks -- because you'll receive them for more years than you would with an average lifespan.

And if you're married, delaying when you start  collecting benefits can be part of a sensible joint strategy. For instance, a couple might start collecting the benefits of the spouse with the lower lifetime earnings record on time or early, while the higher-earning spouse delays starting to collect.

That way, the couple does get some income earlier, and when the higher earner hits 70, they can collect extra-large checks. Also, should that higher-earning spouse die first, the spouse with the smaller earnings history can start collecting those bigger benefit checks.

The more you know about Social Security, the more you can maximize your benefits. You may be able to get many thousands of dollars more out of the program. While you're at it, look into other ways to increase your retirement income.