Social Security at 70 Won't Automatically Work Out. Here's What You Need to Consider Before Delaying Your Claim

I was talking to a family member the other day who's nearing retirement, and when the topic of Social Security came up, he told me he plans to file for benefits at 70.

The logic is simple. Claiming Social Security at age 70 gives your benefits a 24% boost compared to filing at a full retirement age of 67. If you want larger checks for life, along with larger cost-of-living adjustments, delaying your claim until 70 is the way to go.

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But larger checks on a monthly basis don't necessarily equate to getting more Social Security in your lifetime. It's important to note that distinction before you get your mind set on claiming Social Security at 70.

Why a delayed claim may not be your best bet

One lesser-known Social Security nuance is that the program is designed to pay you the same lifetime benefit regardless of when you file if you live an average lifespan. A delayed claim might boost your benefits on a monthly basis, but you'll have to wait longer to get those benefits, thereby forgoing payments you could've had sooner.

If you don't expect to live an average lifespan, but rather anticipate passing away at a fairly young age, then claiming Social Security at 70 stops making sense. And so if you have health issues going into retirement or a family history of people passing away relatively young, then you may not want to delay Social Security past full retirement age.

In fact, in that situation, filing for benefits ahead of full retirement age could make sense. You can sign up as early as age 62.

Let's say your full retirement age benefit is $2,000, but you delay Social Security three years and file at 70 instead. At that point, you're looking at $2,480 per month.

The math should work out in your favor if you live well into your 80s. But if you pass away at 75, you lose out big time. In that scenario, filing for Social Security at full retirement age gives you a lifetime benefit of $192,000, while filing at 70 gives you a lifetime benefit of just $148,800.

Even if you end up living until age 81, the math still favors an earlier claim. In this example, filing at a full retirement age of 67 gives you a lifetime total of $336,000, compared to $327,360 if you file at 70.

That's why you shouldn't assume a delayed Social Security claim is the way to go until you do the math. You may come to the realization that you have to live a reasonably long lifespan just to break even. And if you don't want to take that chance, filing at full retirement age or even earlier may be a better choice.

Your spouse may be the wild card factor

Of course, the scenario above doesn't take one key factor into account -- whether you have a spouse who's likely to be reliant on survivor benefits from Social Security. If you're the higher earner in your household, delaying your claim until 70 doesn't just boost your monthly benefits. It also results in higher survivor benefits for your spouse.

If you only expect to live until your late 70s, you may be inclined to not delay your Social Security claim. But if your spouse is in great health going into retirement and has parents who are still alive and well in their 90s, then it could pay to delay your claim for the express purpose of leaving more generous survivor benefits behind.

All told, claiming Social Security is a personal choice, and there's no such thing as a universally “right” or “wrong” filing age. The key, though, is to not assume that delaying your claim until 70 is the right choice off the bat. It's important to recognize the risks of waiting and make sure you're comfortable with them.

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