Delaying Social Security Until 70 May Cost You Money

The Truth About Claiming Social Security at 70: Is It Really Your Best Option?

Let’s talk about a hilarious Social Security myth: that the government automatically enrolls you when you hit a certain age. Surprise! They don’t. Social Security benefits require your active participation – it’s like expecting your dog to file your taxes – it’s just not happening without your involvement.

That’s right, folks. Even if you’ve dutifully paid into the system for decades, Uncle Sam isn’t going to start sending you retirement benefits unless you ask. It’s the government’s version of “playing hard to get.”

Not only must you take the initiative to apply for Social Security (shocking, I know), but you also face the retirement equivalent of “What’s behind door number 3?” You have multiple claiming age options: start collecting as early as 62, wait until your full retirement age of 67, or delay until 70 for bigger monthly payments.

Many financial experts recommend delaying Social Security until 70. They say this with straight faces, as if we’re all guaranteed to live to 110. Sure, your monthly benefit amount increases by 8% for each year you wait past full retirement age, but that’s assuming you’ll be around long enough to enjoy it!

Are You Potentially Cheating Yourself Out of Money?

Plot twist: claiming Social Security benefits at 70 might actually leave you with less money overall. I know, it’s like finding out your favorite restaurant has been serving decaf all along.

Let’s calculate some numbers, shall we? If your monthly Social Security benefit at 67 would be $1,800, waiting until 70 bumps it up to $2,232. Impressive, right?

But what if you only live until 72? You’d collect that larger amount for just 24 months, totaling $53,568. Meanwhile, had you started at 67, you would have pocketed $108,000 by the same age. That’s double the money! It’s like turning down two pizzas today for the promise of one pizza… someday.

The uncomfortable truth is that delaying Social Security only pays off if your life expectancy is relatively long. Otherwise, you’re essentially leaving money on the table that could have been spent on cruises, spoiling grandchildren, or an impressive collection of garden gnomes.

The challenge? None of us knows our expiration date. Talk about an inconvenient detail in retirement planning!

Key Questions to Consider Before Delaying Social Security

Before you decide to maximize your benefits by waiting until 70, ask yourself these questions:

• Is my health generally good, or do I wheeze going up three stairs?
• Did my relatives live long lives, or did they consider 70 “a good run”?
• Can I afford to retire without those Social Security checks, or will I be eating store-brand cereal for three years?
• Is there something meaningful I could do with that money now? (Hint: The answer is always yes)
• Do I want to continue working, or would I rather be literally anywhere else?

Working through these questions might help determine your ideal Social Security claiming age. The first three are particularly important when deciding whether to claim at 70 or earlier.

Remember, while delaying Social Security until 70 could work out better financially, there’s absolutely no guarantee. It’s essentially a bet on your own longevity – which, let’s be honest, is a strange thing to gamble on.

If you’re uncomfortable with the uncertainty of eligibility options, that’s a perfectly valid reason to claim earlier. After all, a bird in the hand is worth two in the bush – especially when the bush might be in the cemetery.

For more resources and tools on Social Security claiming strategies, check out reputable organizations for guidance.