The beauty of claiming Social Security at age 70 is that once you lock in that higher monthly benefit, it’s yours for life. It doesn’t matter whether you live until age 79 or 84 or 92. No matter how many years your retirement lasts, you’re guaranteed that higher monthly paycheck. The same cannot be said for your nest egg or any other income source.
The Motley Fool
Is that true? No other guaranteed lifetime income. I guess in the extreme that’s true. The insurance company where you bought an annuity might go bust, your former employer may be insolvent and a pension at risk, your bond funds all default and the stocks you have stop paying dividends. Yup, possibilities I guess, but are they real life reasons to delay Social Security to age 70?
If you don’t need SS to live on and you don’t need to work in order to wait until age 70, why not? The advantage is a higher income and higher survivor benefit when you are age 70 and statistically you have about 14 years left to collect – maybe.
It’s a very personal thing for sure. For most people the option of not needing Social Security is not there
QUINNSCOMMENTARY 
I started my SS benefit at 62, in 2018 paid off $28,000 in credit card debt in just 18 months. Saving thousands of dollars in interest. Then I went into savings mode, I now have $18,000 in I-Bonds, Earned over $1,200 in interest since Jan 2022. I have paid down the car loan on my 2020 Ford Edge form $21,762 to $9,146 in just 9 months in 10 more months the balance will be zero, savings = $1,000 in interest vs 48 month pay back. None of this would of happened without taking SS at 62. Time value of money comes into play and I am getting more bang for my SS dollars today than I would get if I would of waited until FRA or age 70. I say if you are smart with your SS dollars you may come out better taking your benefit early.
“No matter how many years your retirement lasts, you’re guaranteed that higher monthly paycheck. The same cannot be said for your nest egg or any other income source.”
Not true – My USAF Military pension is indexed to inflation just like SS. That is one reason I started SS at 62. Since my FRA amount was just $318 more per month than my $872 age 62 reduced benefit in 2018. Sure if your SS benefit is much higher and you did not need the money your FRA or age 70 amount would be much higher. By age 70 I should have $40,000 in my investments not counting interest, that will replace 10 years of the $318 that I will not be getting from SS because I started SS benefits at age 62. For someone who averaged just $12,000 per year income and never made more than $35,000 in a single year while working, I Love seeing my account balances go up every month.
LikeLike
Most people who claim Social Security at age 62 do not have enough monthly, inflation-indexed, guaranteed income to maintain their pre-retirement standard of living. So, yes, deferring until age 70 make no sense if you cannot continue to work (lost employment, medical issues, caregiving, etc.) and if you have no retirement savings.
But, the more likely scenario for most American workers is that they do have some savings. So, for many, the better answer is to delay commencement of Social Security (but not beyond age 70) until the monthly income is equal to monthly regular expenses (or maybe delay a little longer to add a cushion). They would continue employment and/or “gap fill” with retirement savings.
Keep in mind that the increase in monthly benefit from deferral is a lot like using your 401k assets by rolling them over into an IRA annuity – except that the factors Social Security uses are outdated, based on life expectancy decades ago. As a result, you’ll generally find the incremental increase from delaying is the best priced “annuity” you can find.
As with all Social Security claiming strategies, much depends on the person’s own individual situation.
Finally, some worry that the trust fund will be exhausted. Certainly could happen. However, it is not at all likely that Congress will target lower- and middle-income retirees who are in a payout status with their solution- whatever they decide.
LikeLike
The irony of it all is that the people who don’t have a lot of savings and who could use the maximum Social Security benefit are usually unable to work until 70 or near seventy and thus must take a smaller benefit.
LikeLike
The other irony is very low income persons have a much lower life expectancy.
LikeLike