Max Your Social Security at 70

For many years, financial professionals have recommended that most people delay taking Social Security benefits until age 70. The reason is compelling: Each year you delay beyond your full retirement age increases your monthly benefit by 8% in most cases. For those with a full retirement age of 67, waiting until age 70 boosts your monthly check by 24%.

Should You Delay Benefits?

The answer depends on your situation. If you have significant health problems likely to shorten your life expectancy, claiming benefits early often makes sense. However, if you don't need Social Security income to cover daily living expenses, the conventional wisdom to delay until 70 remains strong for most healthy individuals.

Strong Reasons to Delay

First, Social Security benefits are guaranteed by the U.S. government and are completely insulated from market volatility. Once locked in, your payment is secure.

Second, benefits include built-in inflation protection through annual cost-of-living adjustments (COLAs). By delaying, you receive these increases on a higher base, protecting your purchasing power over decades.

Third, the 8% delayed retirement credit significantly outperforms current interest rates on safe investments. It's a guaranteed return that's hard to match elsewhere — and unlike market investments, it carries no risk of loss.

Key Limits to Remember

There's no financial advantage to delaying benefits past age 70, when your benefit reaches its maximum. Claiming at age 68 still earns you partial credits that accrue monthly, so your exact birthday can influence the final amount. On the other hand, starting benefits at age 62 — the earliest allowed — reduces your monthly checks by 30% compared with your full retirement age benefit, for anyone born in 1960 or later.

Deciding when to claim Social Security is one of the most important and irreversible retirement decisions you'll make. The choice will affect your income for the rest of your life. Before deciding, consult your financial advisor and tax professional to ensure the strategy aligns with your overall retirement plan, health, and financial needs.

Source: https://www.ssa.gov/benefits/retirement/planner/delayret.html