Pros/Cons of Waiting Until 70 for Social Security

An informed choice can maximize your security and retirement dreams.  

As you approach retirement, the decision of when to claim Social Security benefits becomes increasingly crucial. While many retirees choose to start collecting benefits as soon as they are eligible, there is a growing trend toward waiting until age 70.  

This strategy promises a higher monthly check, but it’s essential to weigh both the advantages and potential drawbacks before making your decision. 

The Pros of Waiting Until 70 

Increased Monthly Benefits: The most significant advantage of delaying your Social Security benefits until age 70 is the increase in your monthly payment. For each year you delay past your full retirement age (typically 66 or 67), your benefits grow by approximately 8% until you reach age 70. This increase can result in a substantially higher monthly benefit, providing greater financial security in your later years. 

Longevity Insurance: If you expect to live longer than the average life expectancy, waiting until 70 can be particularly beneficial. Higher monthly payments can help cover long-term healthcare costs and other expenses that may arise as you age, ensuring you don’t outlive your savings. 

Spousal Benefits: Delaying your benefits can also positively impact your spouse, particularly if they earn less. If you pass away, your spouse can claim your higher benefit, which can significantly boost their financial well-being. 

The Cons of Waiting Until 70 

Delayed Gratification: Waiting until age 70 to claim your benefits means you’ll need to have alternative sources of income between your retirement and age 70. This could mean drawing down your retirement savings more quickly than anticipated, which may not be feasible for everyone. 

Health and Longevity Uncertainty: While higher benefits are advantageous if you live longer, there’s always the risk of not reaching age 70 or not living long enough to fully benefit from the increased payments. Health issues can arise unexpectedly, and waiting might not be the best option if your family has a history of shorter life expectancy. 

Opportunity Cost: By delaying your Social Security benefits, you may miss out on years of potential income. The money you would have received if you started claiming benefits earlier could have been invested or used for other purposes, potentially yielding returns that offset the benefit of waiting. 

Financial Consequences for You & Family 

When considering the timing of your Social Security benefits, it’s crucial to think about the broader financial implications for both you and your family.  

Here are some factors to consider: 

Current Financial Needs: Assess your current financial situation and determine whether you have sufficient savings, investments, or other income sources to support you if you delay claiming Social Security. If you need the income sooner, waiting until 70 might not be practical. 

Impact on Retirement Savings: Drawing down your retirement savings to bridge the gap until age 70 can impact your long-term financial stability. Ensure you have a comprehensive plan in place to manage your expenses without depleting your savings too quickly. 

Family Health History: Consider your family’s health history and your own health status. If you have a reason to believe you may not reach age 70, or if you have significant health concerns, it might make sense to claim benefits earlier. 

Spousal Considerations: If you are married, discuss the decision with your spouse. The timing of your benefits can affect your spouse’s financial situation, particularly if they will rely on your benefits in the future. 

Making the Right Decision 

Ultimately, the decision of when to claim Social Security benefits is a personal one, influenced by your financial situation, health, and retirement goals.  Consulting with a financial professional can help you navigate this complex decision and tailor a strategy that aligns with your unique circumstances. By carefully weighing the pros and cons, you can make an informed choice that maximizes your financial security and supports your retirement aspirations. 

At Heritage Financial Planning, we use our HFP S.T.A.R. Strategy to help clients evaluate their financial goals, assess risk, and create tailored solutions for a confident future. By aligning your Social Security decision with a comprehensive financial plan, you can maximize your retirement benefits and peace of mind. Contact our office today to schedule an appointment and learn how we can help you make informed, strategic decisions that support your retirement dreams.