Why 70 Is the Magic Age to Unlock an Extra 24% in Social Security Benefits

When you think of the different senior benefits available today, it's hard to overlook Social Security. Those monthly checks serve as a financial lifeline for millions of older Americans. And without Social Security, many retirees would not be able to keep up with their bills.

For this reason, it's important to claim Social Security at the right time. Though your benefits are based on your personal wage history, your filing age also determines how much money Social Security pays you on a monthly basis.

While many Social Security recipients aim to wait for full retirement age (FRA) to claim benefits, you should know that delaying your claim until the age of 70 could pay off in a very big way.

When seniors can claim Social Security benefits

Once you turn 62, you can file for Social Security at any age. But if you want your retirement benefits without a reduction, you'll have to wait for FRA to arrive. FRA is 67 for anyone born in 1960 or later.

However, you don't have to claim Social Security at FRA. You're allowed to wait and file for benefits later, and there's a big incentive to do so.

How Social Security's delayed retirement credits work

While claiming Social Security at FRA avoids reduced benefits, if you're willing to wait, you can take advantage of the program's delayed retirement credits. Delayed retirement credits are worth about ⅔ of 1% for each month you hold off on filing for Social Security past FRA. This means that for every year you wait, your benefits get an 8% increase.

Social Security's delayed retirement credits stop accumulating at age 70. So that's generally considered the latest age to file for Social Security, even though you can technically file at a later point in time.

If you have an FRA of 67 and you claim Social Security at 70, your benefits could get a 24% increase for the rest of your life. And that increase may not only apply to your benefits.

If you're married and are the higher earner in your household, your spouse may be entitled to survivor benefits from Social Security if they outlive you. Those benefits should equal 100% of your monthly checks. So if you boost your Social Security payments by accumulating delayed retirement credits, that benefit passes to your spouse.

On the other hand, Social Security's delayed retirement credits do not apply to spousal benefits. Spousal benefits max out at 50% of the primary earner's FRA benefit. So if you're filing for spousal benefits, there's no reason to delay your claim past your own FRA, since your benefits won't increase.

When it pays to delay Social Security until 70

Waiting until 70 to claim Social Security could result in much larger paychecks for life. It pays to consider claiming benefits at 70 if you don't have a lot of retirement savings and expect to need Social Security to cover the majority of your expenses once you stop working. It could also pay to delay Social Security until age 70 if you expect your lower-earning spouse to outlive you by many years, and you know they'll need larger benefits to get by.

Your health should also play a role in your decision. If you're in great health and expect to live a long life, filing for Social Security at 70 could result in more money on a lifetime basis. And if you have a family history of longevity, that, too, could be a reason to consider claiming Social Security at 70.

When filing earlier makes sense

While filing for Social Security at 70 is guaranteed to give you larger benefits on a monthly basis, it won't necessarily leave you with a larger lifetime payday. If you don't live very long after filing for Social Security, you may not collect enough monthly checks to make up for years of missed payments.

For this reason, if your health is poor and your parents passed away at relatively young ages, you may want to claim Social Security earlier than 70. In a situation where you're worried you may not live past your early to mid-70s, it could actually make sense to file for Social Security benefits as early as possible (meaning, at age 62), as that move could result in more lifetime income for you.

Bottom line

Even if you manage to save well for your senior years, your Social Security benefits may be a big part of your retirement plan. And while claiming those benefits at FRA means avoiding a reduction, there's the potential to get a lot more out of Social Security by waiting.

However, delaying Social Security until age 70 doesn't always make financial sense, despite the potential 24% boost it can lead to. Before you decide on a Social Security filing age, think about your health, family longevity, household income needs, and other goals.

You may find that waiting until 70 to claim Social Security is the best move for your situation. But if not, don't assume you're making a mistake by filing for benefits at an earlier age.

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Author Details

Maurie Backman

Most retirees will make their Social Security claiming decision exactly once, which is why Maurie Backman has spent more than 20 years helping them understand it. She covers benefit calculations, COLA forecasts, and the policy changes that quietly reshape what retirees receive each month. Her work has appeared in Kiplinger, The Motley Fool, 24/7 Wall St., Bankrate, and U.S. News & World Report.