Most retirees know that if they want to maximize their Social Security benefits, they likely need to wait until they turn 70 years old. Individuals receive delayed retirement credits that add 8% to their monthly Social Security checks for every year they delay past their full retirement age up until 70. A 2019 study from United Income found that the majority of retirees would maximize their benefits by waiting until 70.
But there are also downsides to waiting that long. Here are some potential drawbacks to claiming Social Security at age 70.
You're taking a big risk
While the odds are you'll maximize your benefits by waiting until 70 to claim Social Security, there's still a big risk that you won't. Just 57% of retirees would make an optimal decision by waiting that long. That means there's a 43% chance 70 is not the right age for you.
The biggest factor in determining whether or not waiting until 70 is a smart choice is if you live long enough to make up for all the years you go without receiving a Social Security check. Unfortunately, there's no way to know whether or not you'll live that long before you make the decision, but you can make an educated guess.
If certain health factors give you a lower-than-average life expectancy, you might benefit by claiming earlier than 70. That will give you more money to spend to try to improve or manage your health while potentially resulting in a higher lifetime benefit due to a shorter life expectancy.
You could decrease your spouse's benefits
Social Security allows spouses to claim Social Security based on their partner's earnings record. But there's a catch. Not only does the individual claiming spousal benefits need to be eligible to claim benefits themselves (i.e., they're over 62), but their spouse must also be receiving their own benefit.
Of note, spousal benefits max out at full retirement age. That means if you wait to claim until age 70, and your spouse is already at their full retirement age, they may be collecting a smaller benefit than they otherwise could be if you made your claim earlier. As such, your total family benefits could take a hit if you're waiting until 70 to maximize your individual benefit.
It's important to coordinate with your spouse about Social Security claiming strategies. Even if your spouse has to wait to claim a higher spousal benefit, it could work out in the long run when you also factor in survivors benefits. Talking to a financial advisor about your specific situation could be worth the time and money for a lot of couples.
Image source: Getty Images.
You have to pay for Medicare still
Many retirees automatically enroll in Medicare upon turning 65 because they're already collecting Social Security. But if you're delaying your benefits, you'll need to enroll manually.
What's more, you'll be responsible for paying your Medicare Part B premiums out of pocket. Those usually get deducted right out of your Social Security income, but with no benefits check, there's nothing for the government to deduct from at this point.
For 2024, Medicare Part B premiums will cost $174.70 per month. Those with higher incomes, above $103,000 for individuals or $206,000 for joint filers, will have to pay more.
Those premiums can take a big chunk out of your retirement budget if you're not prepared to pay them. If you plan to delay Social Security beyond age 65, you'll need to be sure you've budgeted for Medicare.
Figure out the best age to claim for your situation
While waiting to claim until age 70 is often a good decision, your situation could be different. It's important to take all of your personal circumstances -- your health, your family, and your budget -- into consideration when making a plan to claim Social Security.
