More than 60 million Americans currently rely on Social Security to receive monthly benefits, and just about everyone hopes at some point to collect something from the retirement and disability benefit program. One key question with Social Security involves when to start taking retirement benefits. With the choice to receive smaller payments as early as age 62 or big payments if you wait until 70, there's no end to the amount of information available for those trying to plan their retirement finances prudently.

Until recently, I was convinced that waiting until age 70 to maximize monthly payments for myself and my family was the smartest possible move. But after years of warnings about the current financial state of the Social Security program and the need for fundamental changes, it finally dawned on me that there's absolutely no way to make an informed decision about what I'll do more than a decade from now with my benefit decision. Only once lawmakers get their acts together and come up with a solution to Social Security's woes -- or simply throw their hands up and force everyone to accept the consequences -- will I be able to make a final choice.

Blue Social Security card slid into dozens of pieces of currency.

Image source: Getty Images.

My arguments for waiting to 70

Most people who've researched when to take Social Security benefits are already quite familiar with the reasoning behind waiting until age 70. Without overly belaboring the point, my own personal reasons for delaying include the following:

  • Although I'll have to go from the early 2030s to the early 2040s without receiving any benefits from Social Security, the monthly amount I'll get once my 70th birthday rolls around will be almost 75% higher than it would've been if I'd claimed early.
  • Even though my own family history leaves some doubt about whether I'll live long enough to reach a reasonable breakeven date, I want my wife to have access to maximum survivor benefits based on my work record even after my death.
  • I expect to have enough retirement savings to pay living expenses through age 70 without needing extra income from Social Security. In fact, taking withdrawals from retirement accounts prior to 70 is a key part of tax planning, as I hope to take advantage of low tax rates in lower-income brackets to minimize taxes on my traditional IRA and 401(k) withdrawals early in retirement rather than waiting for required minimum distribution rules to kick in.
  • Waiting longer also reduces the chances that my Social Security benefits will be taxable, as it's likely that both my spouse and I will have retired by my 70th birthday.

Not everyone's in my position, and that's why for many people, 70 is not the ideal age to claim Social Security. Individual considerations can make claiming early at 62, at full retirement age of 66 to 67, or somewhere else earlier than 70 a smart choice.

The unanswered question

If I knew that Social Security would be around in its present form by the time I need it for retirement benefits, then I'd be comfortable counting on my current plan. Yet the big problem I face is that Social Security is slated to deplete its trust funds in 2035 -- right around the time I might need to make a decision. At this point, most analysts assume that if lawmakers take no action, benefits across the board would be reduced by roughly 20% to match up with the reduced revenue available to fund Social Security.

However, there's the possibility that lawmakers might actually do something about the problem -- and their eventual solution could have a big impact on my smartest claiming decision. If lawmakers boost funding by boosting payroll taxes on workers, then I'd get full retirement benefits without any additional cost, making my original plan still work. On the other hand, if the eventual solution ends up cutting my net benefits -- whether through direct payout reductions or through indirect means like boosting taxes on benefit payments -- then an earlier claiming decision could become the better choice. If dramatic changes to family benefit rules make it impossible for my spouse to collect spousal or survivor benefits on my work history, then it would definitely force me to rethink my decision.

Have a plan -- but be ready to pivot

You should still have an idea of what you want to do with your Social Security benefits, regardless of the uncertainty surrounding the program right now. You don't want to plan for retirement without a clue of how you hope Social Security will help you financially. But it's also important to be ready to adjust your Social Security plan based on what happens to the program in the future. That way, you'll have maximum flexibility to make the best choice for you and your loved ones.