The great thing about Social Security is that you're not forced to file for benefits at one specific age. Rather, there's a range of ages you can choose from. But you may want to land on age 70 for one specific reason.
It's all about locking in a solid income
The earliest point at which you can claim Social Security is age 62. Doing so, however, will result in a pretty big hit to your monthly benefit. That's because you're not entitled to that full benefit until you reach full retirement age, or FRA. FRA kicks in at age 66, 67, or somewhere in between, depending on what year you were born in.
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You can also delay your Social Security filing past FRA, and for each year you do up until the age of 70, your monthly benefit will grow by 8%. If your FRA is 67, waiting until age 70 to file will mean boosting your Social Security income by a pretty impressive 24%.
It's for this reason that filing for Social Security at age 70 makes a lot of sense. While delaying benefits until that point means having to wait, and it could mean having to work longer, once you lock in that higher benefit, it's yours to enjoy for the rest of your life.
Now, think about your other retirement income sources. Do any of them come with a guaranteed 24% boost? Probably not.
In fact, even if you enter retirement with a nice amount of money socked away in an IRA or 401(k) plan, you never know how your investments in that plan will perform. If they do poorly, or if the stock market undergoes a series of crashes, you could end up getting a lot less money from your retirement savings than expected.
On the other hand, if you hold off on claiming Social Security until age 70, you're guaranteed to enjoy a boosted benefit. It doesn't matter how well the stock market performs -- that simply has nothing to do with Social Security.
Another thing to consider is that you really don't know what retirement will cost you until that period of life begins. Sure, you can crunch numbers and try to estimate your living costs. But you may not manage to account for every expense accurately until you're actually in that situation.
By filing for Social Security at age 70 and boosting your monthly benefit as much as possible, you might manage to ease your financial stress in the face of higher-than-expected bills. And so delaying your filing as long as possible may be worth it for that peace of mind alone.
Weigh your options
Filing for Social Security at 70 isn't a smart move for everyone. If your health is poor heading into retirement and you don't anticipate living a very long life, then you may be better off claiming your benefits at an earlier age. But if you have no reason to expect a shortened lifespan and you want the financial security that comes with locking in a higher guaranteed benefit for life, then singing up at age 70 is the way to go.
