Claiming Social Security at 70 Could Shortchange You. Here's the Math.

Figuring out when to claim Social Security is one of the hardest retirement decisions you might have to make. If you file for benefits ahead of full retirement age, which is 67 for anyone born in 1960 or later, your monthly checks will be permanently reduced. If you claim after full retirement age, your payments will increase.

Age 70 is when you stop getting credit for delaying your claim past full retirement age. For this reason, it's often referred to as the latest age to sign up for Social Security even though you can technically file well into your 70s or beyond.

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Now knowing all of this, you might assume that claiming Social Security at 70 is your best move. It results in the largest possible monthly check which, incidentally, also means that every cost-of-living adjustment that arrives should put more money in your pocket.

But filing for benefits at 70 could actually leave you with less money from Social Security than filing sooner. It's important to understand the math before making your choice.

Why filing for Social Security at 70 could backfire

It's true that claiming Social Security at 70 gives you the largest benefit you can get. But that's only on a monthly basis -- not necessarily a lifetime basis. And if you don't end up living a particularly long life, you could get shortchanged on Social Security.

Imagine you're entitled to $2,500 a month in Social Security at 67. If you file at 62, that check shrinks to $1,750. If you wait until 70 to file, it increases to $3,100.

But that $3,100 check only really benefits you if you're able to collect it for enough time to make up for a delayed claim. If you live until age 85, for example, you're golden. At that point, you'll be looking at $558,000 in total Social Security income by filing at 70 compared to $540,000 for claiming at 67 and $483,000 for claiming at 62.

But watch what happens if you only live until age 76. At that point, you're looking at about $223,000 in total benefits if you delay your claim until 70.

By contrast, you'd be looking at a total of $270,000 in Social Security by claiming at 67. And you'd be sitting on $294,000 in total benefits with a filing age of 62.

Run all of the numbers

Before you decide that claiming Social Security at 70 is the right choice off the bat, play around with different filing ages and see what total you're looking at based on different lifespans.

Granted, you don't have a way to know exactly how long you'll live. But you can use your health status and family history as benchmarks.

If your health is great and your parents are still alive in their late 80s or beyond, delaying Social Security could make sense. If you're already managing a number of health conditions in your early 60s and your parents didn't live past their 70s, delaying your claim may not be your smartest move.

Of course, making matters trickier is survivor benefits. If you're married and are the higher earner in your household, your spouse gets the equivalent of your monthly Social Security check if they outlive you.

Delaying may not put more total income in your pocket. But it could leave your spouse with larger survivor benefits and ultimately give you more lifetime Social Security at the household level.

The punchline in all of this is that your filing decision isn't an easy one to make. But don't go into it assuming that claiming Social Security at 70 is the best move mathematically, because it may not be.

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