Waiting Until 70 for Social Security Could Cost You Money. Here's the Math Nobody Shows You.

Wait as long as possible. That's the advice that most financial advisors will give you about when to claim Social Security retirement benefits. They will tell you to hold off at least until your full retirement age, or even better, delay until you reach age 70.

The reasoning makes sense. If you begin collecting Social Security benefits before your full retirement age, you'll be hit with a penalty of up to 30%. If you wait until you're 70, your benefits can increase by 24%.

But there's an argument that defies the conventional wisdom. Waiting until age 70 to claim Social Security could cost you money. And there's some math involved that no one shows you.

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The opportunity cost of delaying

Holding off on claiming Social Security until age 70 means that you'll either need to continue working or fully fund your retirement from other sources, such as 401(k) plans and IRAs. You won't receive income from Social Security for at least three years (if your full retirement age is 67) and as much as eight years (if you retire at 62) when you could have.

The forfeited income during those years adds up. Most retirees who wait until 70 to claim Social Security won't break even until they're in their early 80s.

For example, the average Social Security retirement benefit was $2,071 per month as of January 2026. Three years of skipped checks between ages 67 and 70, using this average, would total $74,556.

Sure, your monthly benefit would increase by roughly $497 from delaying claiming Social Security until age 70. But it would take 150 months ($74,556 divided by $497), or 12.5 years, for the higher benefit to make up for the lost income.

The good news is that many Americans live until their early 80s. However, nearly half of 67-year-old men don't live to age 82.5. Around 36% of women don't survive that long.

The discount rate dilemma

Furthermore, the simple breakeven math doesn't factor in the time value of money. Getting $1 in the future isn't as good as getting $1 now because you could invest the dollar and make more money.

Inflation is another factor, since it can erode the buying power of your money. The upside on this front is that Social Security's cost-of-living adjustments (COLAs) increase benefits to keep up with higher prices.

Whether or not collecting Social Security benefits before age 70 is a smart financial move depends on your longevity. But it also hinges on a metric called the discount rate. This rate is the return used to determine the present value of future cash flows.

An often-cited 2022 study by David Altig, Laurence J. Kotlikoff, and Victor Yifan Ye concluded that 'the vast majority of American workers should delay taking their retirement benefits until 70." However, the researchers used a low inflation-adjusted discount rate of only 0.5%. Many retirees should be able to achieve a higher discount rate than that.

Indeed, Pomona College economics professor Gary Smith and financial planner Margaret Smith wrote a 2024 article published in the Journal of Financial Planning titled "It May Be a Mistake to Delay Social Security Retirement Benefits." The article stated, "Our analysis suggests that delaying benefits may often not be the best choice."

They found that delaying Social Security benefits until age 70 for men isn't as good as starting at age 67 "unless the discount rate is less than 0.47 percent." The threshold increases to around 2% for women because they typically live longer.

No one-size-fits-all answer

Delaying claiming Social Security until age 70 can be financially beneficial for many Americans. However, collecting retirement benefits earlier can be a better financial move for many others.

What makes the most sense for you? Think about how long you expect to live based on your health and family history. But also consider what your realistic inflation-adjusted investment returns could be. Contrary to the conventional wisdom, you could be leaving money on the table by waiting until age 70 to claim Social Security.

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