When to Take Social Security: Age 70 Maximizes Benefits

Think of Social Security like a recipe with several moving parts. Your earnings history is the main ingredient, but understanding how they crunch those numbers can feel pretty overwhelming.

The Social Security Administration’s Calculation Process

According to SSA guidelines, the system takes all your covered earnings (that’s wages and self-employment income that got hit with Social Security taxes) and adjusts them for inflation. This reflects how the cost of living has changed throughout your entire career.

The calculation follows these specific steps:

1. The SSA adjusts your historical earnings for wage inflation using national average wage indexing
2. They select your 35 highest-earning years after indexing
3. These 35 years get averaged to create your Average Indexed Monthly Earnings (AIME)
4. Your Primary Insurance Amount (PIA) gets calculated using a tiered formula applied to your AIME

Here’s the kicker: if you worked fewer than 35 years, they plug in zeros for the missing years. Those zeros can really drag down your average indexed monthly earnings.

Understanding the Primary Insurance Amount Formula

Your Primary Insurance Amount (PIA) comes from a tiered formula they apply to your AIME. Based on 2025 regulations, here’s how it breaks down: you get 90% of your first $1,226 of AIME, plus 32% of anything between $1,226 and $7,391, plus 15% of whatever’s above $7,391. Notice how those higher earnings get less generous treatment? That’s by design.

These dollar amounts, called “bend points,” get adjusted annually for wage inflation. The progressive structure means lower-income workers receive a higher percentage of their pre-retirement earnings through Social Security benefits.

Actually, don’t stress if you haven’t kept decades of tax returns lying around. Your SSA account at SSA.gov shows estimated monthly benefit amounts, which makes planning way easier. For personalized benefit estimates and detailed earnings records, consult SSA.gov directly.

When Should I Take Social Security Benefits

You can start collecting Social Security retirement benefits at 62. But “can” and “should” are two very different things. Starting early means accepting permanently smaller payments, and the reduction gets steeper the further you are from your full retirement age.

Full Retirement Age by Birth Year

Your Social Security full retirement age depends entirely on your birth year. According to SSA regulations, here’s the breakdown:

1. Born between 1943 and 1954: Full retirement age is 66
2. Born in 1955: Full retirement age is 66 and 2 months
3. Born in 1956: Full retirement age is 66 and 4 months
4. Born in 1957: Full retirement age is 66 and 6 months
5. Born in 1958: Full retirement age is 66 and 8 months
6. Born in 1959: Full retirement age is 66 and 10 months
7. Born in 1960 or later: Full retirement age is 67

Reaching full retirement age gets you 100% of your earned benefit. But here’s where things get interesting: that 100% isn’t actually the maximum Social Security benefit you can receive.

Early Retirement Reductions

If you claim benefits before your full retirement age, the SSA applies permanent reductions. For example, someone with a full retirement age of 67 who claims at 62 would receive approximately 70% of their full benefit amount. These reductions are calculated monthly and remain in effect for life.

Why Social Security Benefits at 70 Pay Off Big

Here’s something that might blow your mind: age 70 is the absolute best time to claim Social Security if you want maximum benefits. It’s when you’ve squeezed every last penny from the system. Yet the Transamerica Center for Retirement Studies found in their 2023 report that only 4% of retirees actually wait until their 70th birthday to start collecting.

How Delayed Retirement Credits Work

Waiting past your full retirement age can boost your benefits beyond that 100% baseline. Each month you delay earns what the SSA calls delayed retirement credits, and these permanently bump up your monthly payment.

Based on SSA guidelines, how much you earn depends on when you were born:

1. Born in 1933-34: 11/24 of 1% monthly (5.5% annually)
2. Born in 1935-36: 1/2 of 1% monthly (6.0% annually)
3. Born in 1937-38: 13/24 of 1% monthly (6.5% annually)
4. Born in 1939-40: 7/12 of 1% monthly (7.0% annually)
5. Born in 1941-42: 5/8 of 1% monthly (7.5% annually)
6. Born in 1943 or later: 2/3 of 1% monthly (8.0% annually)

These delayed retirement credits stop accumulating at age 70, making that the ultimate deadline for maximizing benefits. Morningstar research suggests that retirees who want maximum lifetime income should seriously consider delayed filing, especially if they can rely on things like part-time work or rental income while they wait.

Strategic Considerations for Married Couples

Delayed filing can also be a smart move for couples where a younger, lower-earning spouse is married to an older, higher-earning partner. The surviving spouse gets to claim the larger benefit if their partner passes away first. This survivor benefit strategy can significantly impact household income throughout retirement.

When Waiting Actually Hurts Your Bottom Line

Look, despite all the math showing why waiting makes sense, delaying Social Security isn’t always the smart play. Several factors might push you toward claiming earlier, including your health situation, available financial resources, and worries about the program’s future.

How surprising that so many folks leave money on the table. Well, it’s not just about being impatient. There are real, practical reasons why claiming earlier often makes perfect sense. Your decision should factor in whether you can cover your essential expenses without Social Security and how confident you feel about the system’s long-term stability. Sometimes that bird in the hand really is worth more than two in the bush.

The Portfolio Depletion Problem

Picture this: you retire at 67 but decide to wait until 70 to claim Social Security. Unless you’ve got other income coming in, you’ll need to pull more from your retirement accounts than you originally planned.

This can backfire in a big way. The reduced growth potential in your retirement accounts might wipe out any gains from those higher Social Security payments. Plus, relying only on portfolio withdrawals exposes you to sequence of returns risk. If the markets tank early in your retirement, each withdrawal takes a bigger chunk from your shrinking account balance. That could lead to running out of money way too soon.

Combining Social Security with portfolio withdrawals and other income sources gives you crucial protection against market ups and downs. Financial advisors often recommend this diversified approach to reduce overall retirement income risk.

Your Health Changes Everything

Poor health completely flips the Social Security equation. If medical conditions seriously cut into your life expectancy, waiting until 70 for maximum benefits might work against you.

You might even want to consider claiming before full retirement age if your health is really compromised. Sure, smaller monthly payments aren’t ideal, but delaying could mean getting few benefits or none at all.

The Longevity Factor

But here’s the thing: most people underestimate how long they’ll live. R. Dale Hall, FSA, MAAA, CFA, CERA, Managing Director of Research at Society of Actuaries, points out that longevity risk is actually increasing. “In 2024, roughly 100,000 people were expected to reach 100 years of age in the U.S., according to estimates from the U.S. Census Bureau. But looking forward, the Census Bureau says that could quadruple to more than 420,000 by 2054.”

Everyone has a breakeven point where those larger future payments make up for the missed early payments. Just make sure your retirement plan accounts for potentially living longer than you expect. For help calculating your personal breakeven age, consult the tools available at SSA.gov.

Worries About Social Security’s Future

Some Americans worry about Social Security’s long-term health and prefer to claim benefits as soon as possible. The Transamerica Center for Retirement Studies’ 2024 report found that roughly 40% of Americans worry Social Security will be reduced or eliminated.

The Trust Fund Reality

These concerns aren’t completely baseless. According to the SSA’s 2024 report on the Status of the Social Security and Medicare Programs, the Old-Age and Survivors Insurance Trust Fund can pay 100% of scheduled benefits only until 2033. After that, the fund reserves will be gone, and program income will cover just 79% of scheduled benefits.

While Congress might step in with supplemental funding, not everyone believes that’ll actually happen. This uncertainty adds another layer of complexity to claiming decisions, though most experts believe some form of Social Security will continue even if benefits get reduced.

Creating a Well-Rounded Retirement Plan

Social Security was never meant to be anyone’s only retirement income. According to retirement planning experts, successful retirement planning needs multiple income streams working together.

Diversifying Your Retirement Income

Some lucky folks have pension-backed jobs that can provide complete income until Social Security kicks in. Many others rely on withdrawals from tax-deferred or tax-exempt retirement accounts, where longer holding periods generally mean better growth potential. Taxable brokerage account earnings support plenty of retirees too.

Conservative savers often turn to certificates of deposit, money market accounts, and other cash equivalents. Insurance products and real estate investments are popular choices as well.

The Role of Continued Employment

Partial retirement through part-time work offers another income avenue, though this isn’t always realistic. Age-related challenges including outdated skills, workplace ageism, and health issues can make continued employment tough or impossible.

The key is building a diversified approach that doesn’t lean too heavily on any single income source, including Social Security. Your optimal claiming strategy should fit within this bigger financial picture, balancing what you need now against long-term security.

For personalized guidance on integrating Social Security into your overall retirement plan, consider consulting with a financial advisor and reviewing the comprehensive planning resources available at SSA.gov.