Waiting Until 70 Can Lift Social Security Payments 24% — But There’s a Major Tradeoff

Holding off on Social Security past full retirement age increases your benefit by 8% a year until age 70. For someone whose full retirement age is 67, that delay can add 24% to each monthly payment for life.

Here’s a closer look at what that extra money can mean, and what it may cost in the meantime.

The Cost of Waiting, and the Reward

Consider a worker with a full retirement age of 67 and a monthly benefit of $2,000 at that age. If that person waits until 70 to claim, the monthly check rises by 24% to $2,480. That works out to an additional $5,760 a year for life, before any cost-of-living adjustments.

But waiting also means giving up three years of $2,000 monthly checks. In total, that worker would forgo $72,000 in benefits during that period in exchange for larger payments later.

Using the $72,000 in missed payments and the extra $480 per month going forward, it would take roughly 150 months to break even. For someone claiming at 70, that means the higher benefit would not fully offset the skipped checks until close to age 83.

How Much Income the Larger Benefit Replaces

SSA data show that Social Security can replace as much as 79% of pre-retirement earnings for very low earners. For middle earners, that figure falls to about 43%, and for the highest earners it is around 28%. Delaying until 70 can improve the replacement rate for middle and higher earners, but it still typically falls short of the 70% to 80% of pre-retirement income that many financial planners aim for in retirement.

Another drawback is that anyone who waits until 70 receives no Social Security payments at all during the three years after full retirement age. That can force larger withdrawals from retirement savings, which may reduce how long those assets can provide extra income.

Claiming Later Does Not Create New Income

Claiming at 70 does produce the biggest monthly Social Security check available. Still, the benefit formula does not change based on when you file. Your earnings record determines the total benefit, while the age you start claiming only changes how that benefit is distributed over time. Filing at 62 means smaller checks for a longer period; filing at 70 means fewer years of payments, but larger ones.

Choosing the best age to file can be difficult because no one knows how long they will live. A person focused on maximizing benefits by waiting until 70 would have come out ahead by filing at 62 if they died at 71. On the other hand, someone who claimed at 62 but lived to 100 would likely have received far more over a lifetime by waiting until 70. That is why family history and outside assets matter so much when deciding when to start Social Security.

Before deciding when to claim, it is wise to speak with a financial advisor.