The Surprising Reason You May Want to Claim Social Security at 70

There's a reason 62 is a popular age to claim Social Security: It's the earliest age to sign up. And it's hard to pass up that opportunity, given that you don't know what the future holds -- and that it's always a nice thing to get your hands on money right away.

But you should know that filing for Social Security at 62 will reduce your monthly benefits permanently. If you want the benefits you're entitled to without a reduction, you'll have to wait until full retirement age, which is 67 for anyone born in 1960 or later.

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You also have the option to delay Social Security past full retirement age for boosted benefits. For each year you wait, those benefits increase 8%. However, the option to grow your benefits ends at 70, which is why that's generally considered the latest age to sign up for Social Security, even though you can technically file even later.

Of course, claiming Social Security at 70 is not easy, since, for many people, it means having to work until that age. But there's a big reason you may want to consider holding off on Social Security until your 70th birthday arrives.

Claiming Social Security at 70 could soften a big blow

Claiming Social Security at 70 could be tough. If you don't have savings, it could mean having to plug away at a full-time job for a few extra years at a point in life when you may be burned out.

And even if you do have savings, if you decide you're waiting until age 70 to claim Social Security and you stop working a few years prior, you'll have to draw down quite a bit of your nest egg to cover your costs. That's a sacrifice right there.

But there's a big reason delaying Social Security could make sense today. And it's that doing so could put you in a better position to manage in the face of benefit cuts.

In the coming years, Social Security may be forced to slash benefits universally once its trust funds run out of money. That could deal a huge blow to seniors who rely on those benefits to stay afloat. And it could be a terrible thing for future retirees, too.

Some lawmakers are invested in preventing benefit cuts, but it's unclear whether they'll be able to. If you want to protect yourself from benefit cuts, you may want to sign up for Social Security at 70.

Doing so won't get you out of benefit cuts if they happen. But what it will do is give you larger monthly benefits to start out with. That way, if benefit cuts happen, you might still come away with a decent chunk of money after all's said and done.

Imagine you're eligible for $2,000 a month at age 67 and you sign up for Social Security at 70 instead. That means you'll get $2,480 a month.

If Social Security is cut by 20%, your $2,480 monthly benefits could shrink to $1,984. But in that case, you're roughly where you would have been in terms of monthly income by claiming benefits at full retirement age. So it's a move worth considering if you're very worried about the impact of Social Security cuts on your retirement.

Weigh your options carefully

Claiming Social Security is a big decision, and one that requires a lot of thought. You may decide that waiting until 70 just isn't feasible, despite the potential upside. But take the time to work through your options so you're able to set yourself up with the income you need to cover your retirement expenses without too much worry.

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