Patience is (sometimes) a virtue when it comes to claiming Social Security

Summary

• Delaying Social Security until age 70 increases your monthly benefit—potentially adding hundreds of thousands of dollars in retirement income for those who live into their 80s and beyond.
• Personal circumstances—including poor health, cash flow needs, or being the lower-earning spouse in a couple—might favor earlier claiming.
• Your optimal claiming age ultimately depends on how long you'll live—an unknowable variable that makes Social Security timing a personalized decision rather than a universal formula.

The waiting game

To delay or not to delay. That’s the question many soon-to-be retirees ask when it comes to claiming Social Security.

Is it better to start getting monthly Social Security payments as soon as you turn 67, which is now considered “full” retirement age by the Social Security Administration? Or is it better to delay them by a year or two or three, which would mean getting an 8% boost in your monthly Social Security check for each year you hold off?

It’s a hard question to answer conclusively because at the heart of the issue lies an enormous unknown: how long you’re going to live.

If you’re in poor health and don’t expect a long life, it probably makes financial sense to start taking Social Security right away—maybe even at 62, the earliest age you can claim Social Security. Yes, Social Security benefits are lower for those who claim early. But even with a reduced monthly check, you could still wind up getting more total retirement income from Social Security via early claiming than you would by waiting to 67 or 70 (assuming you get there). Of course, modern medicine is always improving, so living like there’s no tomorrow increases the risk of running out of money should tomorrow actually come.

On the other hand, if you’re in good health and your parents lived to a ripe old age, delaying until age 70 to claim may be the best choice, assuming you have other savings you can tap in the meantime. “The math favors delay if you think you’ll live longer either because of family history or your lifestyle,” says Benny Goodman, a veteran actuary and vice president with the TIAA Institute. The risk here is just because mom and dad lived to 90, there’s no guarantee you will too, even if you eat right and exercise.

Benefits of delayed claiming

For the average person weighing their retirement options, most scholarly research on this topic favors delaying Social Security until age 70—the age at which new claimants are eligible for the highest benefit. A 2022 paper coauthored by David Altig, chief economic advisor at the Federal Reserve Bank of Atlanta, found that 90% of U.S. workers would benefit from waiting to claim Social Security until 70. Altig and his coauthors concluded that the financial gain associated with delaying was especially large for higher-income households. At the time of Altig’s study, the median increase in lifetime discretionary spending associated with waiting till 70 was approximately $290,000 for workers whose income was in the 75^th percentile.¹

A 2019 study reached a similar conclusion. Coauthored by Alicia Munnell, a senior advisor with TIAA, this study concluded that the 8%-a-year reward for delaying was overly generous. As a result, the Social Security formula favors claiming benefits at 70, especially for high earners.²

The mathematical argument in favor of delaying until age 70 seems straightforward. Consider Victor, a 67-year-old in average health who’d been earning $150,000 a year before retiring in July 2025. His monthly benefit for claiming at 67 would be $3,225, according to the Social Security Administration’s benefits calculator. But if Victor delays claiming until age 70, his monthly benefit increases to $4,137. By 2038, Victor will have collected more total money from 10 years of Social Security benefits by claiming at 70 than he would have from 13 years of benefits had he claimed at age 67. Given that the average life expectancy for 65-year-olds is 84 for men and 87 for women,³ the actuarial tables favor Victor delaying as he’ll be 80 in 2038.

Goodman does offer an important caveat. He notes that much of the scholarly research favoring delayed claiming was written at a time when short-term interest rates were lower than they are right now. Today, a Social Security check issued to a 67-year-old can be deposited in a money market fund yielding 4%, whereas that same money market fund might have been yielding only 1% in 2022. We’ll spare you a deep dive into the math but suffice it to say that today’s higher interest rates reduce the advantage of delaying. “It’s harder now to say definitively that you should wait,” says Goodman.

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