2 Reasons Not to Claim Social Security at 70

There's a reason some retirees are tempted to claim Social Security at 70, even though they can start collecting benefits as early as age 62.

Age 70 is generally considered the "latest" age to file for Social Security, even though you can technically delay your claim beyond that point. And it's the filing age that lets you maximize your benefits.

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You're eligible for your benefits without a reduction at full retirement age, which is 67 if you were born in 1960 or later. But for each year you delay Social Security past full retirement age, until you turn 70, those payments get an 8% boost that stays with you for life.

Despite that upside, filing for Social Security at 70 doesn't make sense for everyone. Here are two reasons not to make 70 your filing age.

1. You have health issues and don't expect to live all that long

Waiting until age 70 to claim Social Security means scoring larger checks. But it comes at the cost of many months of lost payments. For that to make financial sense, you need to live long enough to recoup those lost payments and come out ahead.

If you think you might live until your mid-80s or beyond, then claiming Social Security at 70 could pay off. But if you have health problems and don't expect to live past your late 70s, then filing for Social Security sooner could result in larger lifetime benefits. In fact, in that situation, it could even pay to take benefits before full retirement age, despite the reduced monthly checks.

2. You need the money sooner

While delaying Social Security until 70 gives you a larger guaranteed retirement paycheck for life, you need a way to cover your bills until your 70th birthday arrives. If you find yourself out of a job before 70 and don't have enough savings or other income streams to support yourself in the interim, then filing for Social Security earlier is smart.

Let's say you're laid off at age 65 and don't have savings. If your essential needs total $2,400 a month and your Social Security checks need to reach that amount, you should file right away.

Racking up $2,400 a month in debt, or nearly $29,000 a year, could cost you much more in interest over time than what you gain via boosted Social Security checks -- especially if you have to incur that debt for many years.

When delaying Social Security until 70 is feasible and makes sense from a life expectancy standpoint, it can be a savvy financial move. But in the situations above, you're generally better off claiming benefits sooner.

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