Social Security gives you flexibility with when you sign up. Though you're not entitled to your full monthly benefit based on your wage history until you reach full retirement age, or FRA (which is between ages 66 and 67), you can file for benefits as early as age 62 or delay your filing all the way until 70. In fact, technically, you don't have to sign up at age 70, but there's no reason to delay past that point.
Filing for benefits early will shrink them on a permanent basis, while delaying your filing will result in a permanent boost. It's for this reason that you may be tempted to sign up for Social Security at age 70. But will you regret that decision later on?
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The pros and cons of filing at age 70
First, the upside: Claiming Social Security at age 70 will leave you with a higher monthly benefit than what you'd get by claiming on time. For each year you delay filing past your FRA up until age 70, your benefits increase by 8%. This means that if your FRA is 67, filing at 70 will boost your monthly income by 24% for life. That's a pretty sweet deal.
On the flip side, claiming Social Security at 70 means having to wait longer to get your money. That could, in turn, get in the way of your meeting some of your retirement goals.
But that's not the only thing: Filing at 70 is also somewhat of a gamble, because if you don't live a particularly long life, you could end up losing money by virtue of delaying too long.
Say you're entitled to $1,600 a month at an FRA of 67. If you hold off until age 70 to sign up for benefits, you'll get $1,984 a month instead, and that's a nice bump. However, you'll also miss out on three years' worth of benefits, and it will take until age 82 1/2 just to break even from that loss of income. But if you don't wind up living beyond 82 1/2, you'll actually come away with less lifetime income from Social Security by virtue of having delayed your filing as long as possible.
What's the right move for you?
Age 70 is hardly a popular time to sign up for Social Security. Under 4% of seniors file for benefits at that age. By contrast, age 62 remains the most popular age to claim benefits despite the reduction in monthly income it results in. But still, it pays to weigh the advantages and drawbacks of taking benefits at 70 and see what's right for you.
If your health is great and you have no reason to think you won't live a long life, then delaying your filing until age 70 could boost your retirement income in a very meaningful way. But if you're not willing to take that risk, filing when you reach your FRA may be a better compromise. The last thing you want to do is sign up for benefits at 70 and regret it afterward, so think long and hard before making your choice.
