Waiting to claim Social Security until age 70 will earn you the largest monthly checks possible, since you get delayed retirement credits up until this age after you've passed your full retirement age. These credits raise the size of your benefit 2/3 of 1% for each month you wait, which adds up to an 8% annual increase in benefits.
For around 6 in 10 retirees, claiming benefits at 70 is the financially optimum choice that results in the largest amount of lifetime benefits. It's also the strategy recommended by Stanford experts.
But that doesn't necessarily mean delaying your benefits until 70 is the best choice for every retiree. In fact, there are three big reasons you could come to regret the decision to delay.
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1. You could die before you break even
Since you can start receiving Social Security benefits as early as age 62, waiting until 70 means you give up eight full years of potential benefits. That's a lot of money to miss out on.
Of course, your checks will be much larger if you wait, due to the delay in the age you start receiving them. However, the extra monthly money you get will take time to add up to the full amount of forgone earnings. In fact, it could take more than a decade until you break even for the missed benefits, and you could end up better off for having delayed.
The problem is, not everyone lives into their 80s. And if you don't, you could end up with smaller lifetime benefits than you'd have received if you had waited. This, of course, is a regretful outcome. If you have a spouse relying on survivor benefits, however, the fact that you waited to claim your Social Security would result in your widow(er) receiving a higher benefit after you're gone. This could sometimes mean more lifetime income as a couple, but that's possible only if you were the higher earner and you pass away first.
2. You could get really sick and not be able to enjoy your money
As you get older, the chance of serious health issues increases. While you may have big plans for all you'll do with the extra money you'll get in your Social Security checks due to waiting until 70 to claim them, you may end up with serious medical problems before you actually start your benefits. If that happens and you can't really go anywhere or do much, you might regret that you didn't start your benefits earlier, when you could've enjoyed the money more.
On the other hand, if your health issues end up being costly, you may be glad that you have the extra Social Security benefits available to cover the bills.
3. Benefit cuts could happen before you claim
Social Security benefit cuts are a real possibility in the future. In fact, if lawmakers don't act to shore up the program's funding, retirees could face a 24% cut to benefits automatically in 2035 when the program's trust fund may run short. If lawmakers take action to prevent this big cut, chances are good that any deal to fix Social Security's finances will involve some type of cut to benefits, anyway.
If you're waiting to start your checks until 70 and a benefit cut happens in the interim period, you may wish you hadn't given up the opportunity to get your full checks before cuts went into effect. Of course, lawmakers would most likely phase-in benefit cuts over time, so you'd probably have some warning this was going to happen. If so, you might be able to change your claiming strategy and start getting checks earlier.
Still, the future is uncertain. If you wait until 70 and later wish you hadn't delayed, you can't go back in time and change course. You may be willing to gamble on the fact you'll end up better off by delaying, but just be aware that this isn't always a surefire way to end up better off, even if it often seems it might be.
