Delaying Social Security benefits until age 70 is often touted as a strategy to maximize lifetime income.
However, this path comes with trade-offs, including the possibility of dying earlier, the need to dip deeper into your retirement savings while you wait, and the risk of future benefit cuts.
These concerns could explain why few people choose to wait for a larger check. While economists generally recommend waiting, the reality is that most Americans don’t.
In 2022, about 10% of retirees claimed Social Security at age 70, 29% at age 62, and 61% before reaching full retirement age. (1)
Here’s what you need to know about the pros and cons.
When you delay claiming past your full retirement age (FRA), your Social Security benefits increase through “delayed retirement credits.”
For each full year you postpone after reaching this age, which is determined based on the year you were born and is set at age 67 for those born in 1960 or later, 8% is added to your benefit until you reach age 70.
According to the Social Security Administration (SSA), a high-income person retiring in 2025 could expect to receive $2,277 a month more if they retire at age 70 instead of 62, which is the earliest age at which benefits are available. (2) And they could expect $1,090 more if they retire at age 70 instead of FRA.
Social Security is inflation-protected and guaranteed by the government, so a delay can serve as insurance against the survival of your assets.
Read more: Vanguard reveals what could happen to US stocks and is ringing alarm bells for retirees. Here’s why and how to protect yourself
Life expectancy: The argument for delay assumes that you have a reasonable life expectancy to recover “lost” benefits from previous years.
Dying at age 70 could turn the delay into a net loss; living to be 90 can make it worth it. For those with a shorter life expectancy due to health problems, waiting could be risky.
Survivors, like spouses, receive a portion of the benefit, but not necessarily all of it. The exact proportion depends on your delayed retirement credits and the principal insured amount. And if you die before, the credits you would have earned later will not be used.
Sequence of returns and portfolio depletion: To maintain cash flow while you wait, you may need to withdraw more funds from your retirement portfolio in the early years. If markets stumble in that period, withdrawals will deplete assets more aggressively and reduce their ability to benefit from higher Social Security checks later. This is known as the risk-return sequence.
The effective cost of delayed claims is not just lost payments – it’s increased pressure on your investment cushion. A market crash around that time can lead to permanently smaller savings.
Lost Flexibility: Once you activate your Social Security benefit, you’ll have a reliable income stream. That security can free you from worrying about depleting your investments to the extent that you don’t use enough of the money you’ve worked so hard to save for.
Studies show that retirees are more likely to spend guaranteed income, such as from Social Security, than to withdraw from their portfolios.
According to the Retirement Income Institute, retirees spend about 80% of their guaranteed lifetime income, but only about half of their other income. (3) Therefore, by delaying it, you can spend less even when you can afford to enjoy retirement.
Reductions in benefits in the event of insolvency or renovations: Social Security’s long-term finances are under pressure. Without reforms, the SSA predicts it will only be able to pay 77% of scheduled benefits to retirees, their families and survivors by 2033. (4)
If structural reforms reduce future benefits, the value of the delay could erode. You not only risk underutilization, but also reduced credit during that waiting period.
Delaying until 70 may be rational if you have a substantial financial cushion, are in good health (or come from a family with a long life expectancy), and your portfolio is well diversified.
A good tip is to run scenarios. Compare the value of getting paid sooner versus potentially larger checks later.
Delaying Social Security is a high-risk bet for health, markets and policies. It can give good results, but it can also be counterproductive. Make sure you understand what is really at risk before you get involved in it.
We rely only on verified sources and credible third-party reports. For more information, see our editorial guidelines and ethics.
Bipartisan Policy Center (1); Social Security Administration (SSA) (2); Retirement Income Institute (3); Social Security Administration (4).
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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