You can begin taking Social Security as young as age 62, but if you hope to take home your largest monthly benefit, you'll have to wait. Every month you delay your application will boost your checks slightly until they max out at age 70.
But that doesn't mean waiting to claim Social Security is always the best option. There are three main drawbacks you need to weigh before you decide if applying at 70 is right for you.
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1. You could receive less benefits over your lifetime
It's unfortunate, but some people don't make it to 70. This is more likely to happen to those with serious health conditions, but accidents can take the lives of even the healthiest among us at any time. If this were to happen to you, there's a chance you may not get to claim Social Security at all.
Even if you live long enough to claim at 70, you might wind up with a smaller lifetime benefit than you would have gotten had you signed up earlier. Again, it comes down to life expectancy.
Let's say you qualify for the $1,909 average monthly benefit at your full retirement age (FRA) of 67. But instead of claiming then, you choose to delay Social Security and grow your checks 8% per year until you reach 70. At that point, you qualify for a benefit of $2,367 per month.
If you collect benefits until age 85, you'll receive $426,060 over your lifetime. That's close to $14,000 more than you'll get signing up at your FRA. Even though you receive three fewer years of checks by delaying until 70, the larger size of each check eventually nets you a bigger lifetime benefit. But that's not always the case.
Let's assume all factors remain the same, but instead of living to 85, you only live until 75. In this scenario, you'd only get your larger checks for five years and wind up with $142,020. That's no small sum, but it's a lot less than the $183,264 you'd have starting your benefits at age 67.
2. Managing your finances in your 60s could be more difficult
Social Security forms the backbone of many seniors' retirement plans, as close to two in five adults age 65 and older rely on it for more than half their income. For some, it's their only source of funds because they weren't able to save much for retirement when they were younger.
Though the promise of larger Social Security checks is appealing, delaying benefits also means seniors will need to cover any retirement expenses on their own until 70. It might not be a big deal for those who plan to work until then, but if you're forced into an early retirement due to illness or caretaking requirements, that might not be an option.
If you don't have adequate personal savings, delaying Social Security could cause severe financial hardship in the present that larger checks in the future won't make up for. If you can't afford your mortgage payments today, you risk losing your house. You can't just give your bank an IOU until you receive your Social Security checks in a few years.
3. You could prevent other family members from claiming benefits
If you qualify for Social Security benefits based on your work history, your spouse and any dependent children may qualify for benefits as well. But they can only apply for them once you start claiming Social Security yourself. If you delay your checks until 70, you'll prevent them from receiving any benefits until then.
Children are only eligible for Social Security if they're under 18 (or 19, if still attending secondary school) or became disabled before age 22. They may not get to claim benefits at all if they turn 18 before you turn 70, and that could cost your household thousands of dollars.
Spouses may be able to claim their own benefit as early as 62 if they also worked long enough to qualify for checks on their own. But they can't claim a spousal benefit until you apply. Spousal benefits increase for every month the spouse delays claiming, but unlike retirement benefits, they max out at FRA. If they have to delay beyond that because you haven't applied yet, it could cost them money.
How do you decide when to apply for Social Security?
The above factors can make the decision about when to claim Social Security complicated. There's no way to know your life expectancy, so you'll have to make your best guess. You'll also have to take a hard look at your finances to see whether delaying benefits is even feasible for you. And you'll want to loop in other family members who will be affected by your choice.
For most people, delaying Social Security does result in a larger lifetime benefit, so this might be the way to go if you're healthy and confident you can afford to wait. But if not, there's nothing wrong with claiming earlier.
Your claiming age doesn't have to be set in stone. Be prepared to change your mind as your retirement plans evolve over time.
