Statistics Say Retirees Should Claim Social Security Benefits at Age 70: Here Are the Pros and Cons

One of the most important decisions a retired worker will make is when to start Social Security. The choice is particularly momentous because monthly benefits are often the largest source of retirement income, and claiming age has a profound impact on the size of those monthly checks.

Many experts have run statistical analyses on the topic, and the prevailing consensus is this: Lifetime Social Security income is generally maximized by delaying benefits until age 70, assuming average life expectancy. But that does not mean 70 is the right age to claim Social Security. Some retired workers may want to maximize benefits at any cost, but others may have different priorities. Both are OK as long as the decision is made with full understanding of the consequences.

Here are the pros and cons of delaying Social Security retirement benefits until age 70.

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Pro: Social Security retirement benefits are permanently increased

Workers can start Social Security benefits at age 62, but they are not entitled to their full retirement benefit or primary insurance amount (PIA) until full retirement age (FRA).

Those who claim early get a smaller benefit for life, equal to less than 100% of their PIA. Those who claim late get a bigger benefit for life, equal to more than 100% of their PIA. But delayed retirement credits stop at age 70, so it never makes sense to claim Social Security any later.

The chart below shows the connection between birth year and FRA, and it details the benefit (as a percentage of PIA) payable to retired workers who claim at age 62 and age 70 in each group. For context, retired workers who claim at FRA get 100% of their PIA.

Data source: Social Security Administration. Note: Benefits are shown as a percentage of PIA.

Clearly, claiming age has a profound impact on Social Security income. Consider a hypothetical worker born in 1960 with a PIA of $1,500: Their monthly benefit would be $1,050 if they claim at age 62, but it would be $1,860 (77% higher) if they claim at age 70.

Pro: Social Security survivors benefits are permanently increased

The "pro" discussed in the previous section is straightforward: All else equal, retired workers who take Social Security at age 70 get a larger benefit than those who claim earlier. But there is another advantage in some cases, and this one is a little less obvious.

The spouse of a retired worker is eligible for survivors benefits when their partner passes away, and the survivors benefit they receive at FRA is equal to 100% of the retirement benefit paid to their now-deceased partner. In other words, retired workers who delay Social Security until 70 will leave their spouse a larger survivors benefit.

That information is particularly relevant in situations where (1) a substantial age gap exists between spouses and (2) the older spouse is also the higher earner.

Con: Retired workers must accept a temporary reduction in spending power

Delaying Social Security is a trade-off between more income in the present and a larger benefit in the future. Retired workers willing to accept those terms are choosing a lower living standard today with the expectation of a higher living standard tomorrow.

Making that trade will probably require a reduction in discretionary spending that begins well before retirement, though the extent of the reduction depends on how heavily the worker was planning to lean on Social Security. Some workers may wish to maintain a consistent living standard rather than suffer through a roller coaster of highs and lows.

Con: Social Security spousal benefits are delayed

Spouses can claim Social Security benefits (i.e., spousal benefits) on the work record of their partner but only if two conditions are met: First, the spouse must be at least 62 years old, the same age of entitlement for retired-worker benfits. Second, their partner must be receiving their own Social Security benefit.

Workers who delay their own retirement benefit until age 70 are also postponing spousal benefits for the same amount of time. Doing so could amplify the reduction in spending power created by delaying retirement benefits in the first place.

Con: Medicare enrollment must be done manually and Part B premiums must be paid out of pocket

Eligibility for Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) begins at age 65, and Social Security recipients are automatically enrolled in both. Part A is generally free of charge, but Part B premiums are taken directly from Social Security checks.

Retired workers who delay Social Security until age 70 have two problems: First, they must enroll themselves in Medicare and, to avoid permanent Part B late penalties, they must complete their enrollment during the appropriate seven-month window. Second, they must cover Part B premiums out of pocket until they claim Social Security.