Why Delaying Social Security to 70 Pays Off in More Ways Than a 77% Bigger Check
Waiting until 70 to claim Social Security puts more money in your pocket each month, but the bigger paycheck is actually one of the smaller reasons to delay. The real benefits go far beyond what most retirees expect.
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When it comes to claiming Social Security, you have choices. Those choices start at age 62, which is the earliest age to file for retirement benefits. From there, your monthly checks increase for every year you wait until your 70th birthday arrives.
You should know that the difference between claiming Social Security at 62 versus filing at 70 is a 77% increase. On a regular monthly basis, that’s a huge boost.
For example, let’s say your full retirement age benefit from Social Security is $2,000. Filing at 62 will reduce that benefit to $1,400. But waiting until 70 leaves you with a monthly paycheck of $2,480. And having 77% more money each month could make your retirement more comfortable.
Larger monthly benefits aren’t the only reason to delay Social Security to 70, though. There are a number of other perks you might enjoy as well.
1. Larger cost-of-living adjustments
Social Security benefits are eligible for a cost-of-living adjustment (COLA) each year. The reason behind COLAs is that prices tend to rise over time due to inflation. By giving benefits a boost when inflation goes up, retirees don’t automatically lose out on buying power through the years.
Social Security COLAs are given on a percentage basis. This year, for example, benefits rose 2.8%. But the larger your benefit is each month to begin with, the more extra money each COLA that arrives should put in your pocket.
Going back to our example, let’s say you’re looking at a benefit of $2,480 versus $1,400. A 2.8% raise applied to a $1,400 check is about $39. For a benefit of $2,480, it’s more like $69.
2. More peace of mind
You might have different income streams available in retirement. These may include savings, a portfolio of dividend stocks, or bonds.
But your other income streams could shrink or run out. Your savings could get spent down and the value of your investments could decline.
Social Security, on the other hand, is guaranteed to pay you a monthly benefit for the rest of your life. So if you lock in larger benefits by delaying your claim until age 70, you can enjoy more financial peace of mind throughout your senior years.
3. Larger survivor benefits
If you’re the higher earner in your household, your spouse may be used to depending on you financially.
You should know that if you pass away before your spouse does, they’ll typically be entitled to survivor benefits from Social Security equal to 100% of your monthly checks. So if you boost those benefits by delaying your claim until age 70, you can leave your spouse with much larger Social Security checks in your absence.
It’s a big decision, so weigh your options carefully
Filing for Social Security at 70 isn’t the right choice for everyone. If you have health issues and don’t expect to live a longer life, then filing earlier could be a smarter move. But it pays to consider the perks of claiming Social Security at 70 that go beyond a larger payday each month in the course of making your choice.
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Maurie Backman has more than a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. Her work has appeared on sites that include The Motley Fool, USA Today, U.S. News & World Report, and Kiplinger.
Prior to becoming a full-time financial writer, Maurie worked in the financial industry trading distressed debt. She then changed course and spent a few years designing electronic toys. After a stint in content marketing and UX, she shifted back into writing and has since covered everything from the housing market to estate planning to Medicare.
When she's not busy writing, Maurie can be found hiking, walking her dogs, driving her kids to their various sports practices and games, and curling up with a good book. She cooks on occasion and bakes way too often.
