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The Best Reason to Take Social Security Long Before Age 70

By Katie Brockman – Oct 3, 2020 at 9:01AM

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In some cases, waiting too long to claim benefits could cost you.

A whopping 96% of women and 98% of men claim Social Security benefits before age 70, according to a report from the Center for Retirement Research at Boston College.

These retirees may have the right idea. Although you can receive more money each month by waiting longer to begin claiming, there's one good reason to consider claiming long before age 70: You could collect more money over a lifetime.

Stack of Social Security cards

Image source: Getty Images.

Why claiming early could be a smart financial choice

Many experts advise waiting until age 70 to claim benefits in order to collect as much as possible from Social Security, but in some cases, you could actually receive more money over a lifetime by claiming earlier.

Social Security benefits are designed so that in theory, it shouldn't matter when you begin claiming. Whether you receive a lot of smaller checks by claiming early or fewer bigger checks by delaying benefits, the amount you collect over a lifetime should be approximately the same either way.

That said, what works out on paper doesn't always translate to real life, and your life expectancy will have a significant effect on how much you receive over a lifetime.

In many cases, you'll need to live into your 80s or beyond to reach your break-even point. If you have reason to believe you may not live that long, waiting longer to file for Social Security could be a costly mistake.

Just how much could you miss out on by delaying benefits?

Depending on how long you live, you could potentially receive tens of thousands of dollars more over a lifetime by claiming benefits at the right age. And for many people, that means claiming benefits well before age 70.

Let's say, for example, you have a full retirement age of 67 years old, and by claiming at that age you'd collect $1,500 per month -- which is roughly how much the average beneficiary receives, according to the Social Security Administration.

If you claim at age 62, your benefits will be reduced by 30%, leaving you with $1,050 per month. Wait until age 70 to claim, and you'll receive your full benefit amount plus an extra 24%, or $1,860 per month. Here's how much you'd receive in total benefits depending on what age you began claiming:

Age Total Lifetime Benefits When Claiming at 62 Total Lifetime Benefits When Claiming at 67 Total Lifetime Benefits When Claiming at 70
67 $63,000 $0 $0
70 $100,800 $54,000 $0
75 $163,800 $144,000 $111,600
80 $226,800 $234,000 $223,200
85 $289,800 $324,000 $334,800

Source: Author's calculations

In this scenario, if you were to claim benefits at age 70, you'd have to live until around age 85 to break even. If you don't expect to live that long, you could actually collect more money over a lifetime by claiming before age 70. Say, for example, you live to age 75. In that case, you could receive around $50,000 more by claiming at age 62 than if you'd filed for benefits at age 70.

Furthermore, because the average lifespan in the U.S. is 78.6 years, according to the Centers for Disease Control and Prevention, waiting until age 70 to file for benefits may not be the best move for the average retiree.

Sometimes waiting isn't the best option

Despite the fact that you'll receive more money each month when you delay benefits, waiting to claim isn't the right move for everyone. By considering your life expectancy and being strategic about when you file for Social Security, you can maximize your benefits and enjoy a more comfortable retirement.

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