If you want to maximize your monthly Social Security checks, waiting until 70 to claim benefits is a smart move. Your monthly benefit at 70 would be about 77% higher than it would be if you started as soon as you became eligible at 62.
But what happens if you hold out beyond age 70? Will your Social Security benefits get an even bigger boost? Read on to learn what happens if you don’t claim Social Security by 70.
Do You Get More Social Security Money if You Wait Past 70?
The short answer is no. You won’t increase your Social Security benefits if you delay beyond age 70.
At full retirement age, you’re eligible for your full benefit, also known as your primary insurance amount. If you claim early, you’ll receive a reduced amount. However, for each year you wait beyond your full retirement age — which is 67 if you were born in 1960 or later — you’ll receive an 8% delayed retirement credit. But you stop earning those delayed retirement credits once you reach age 70.
What Happens if You Don’t Collect Social Security at 70?
While there’s no rule that says you have to collect Social Security at 70, there’s no reason to delay benefits any longer. Your benefits max out once you’re 70. Waiting won’t result in bigger Social Security checks.
If you haven’t applied for benefits by the time you’re 70, Social Security will retroactively pay you up to six months’ worth of benefits. However, you’ll forfeit any delayed retirement credits you earned for those months.
What if I’m Still Working at Age 70?
If you’re still working at age 70, you could continue to increase your benefits under some circumstances. But the boost would come from working, not from delaying Social Security.
Your Social Security primary insurance amount is based on your 35 highest-earning years.
If you haven’t worked 35 years, continuing to work would increase your benefits. Likewise, if you’ve worked 35 years and your salary is higher than one of your other highest-earning 35 years, you’d also get more.
Regardless, you don’t have to worry about reducing your benefit by working. If you work while collecting Social Security before your full retirement age, you’ll receive a smaller benefit if you earn more than $19,560 in 2022. But once you’re past full retirement age, you get to keep your full benefit no matter how much you earn.
One thing to be mindful of is the tax consequences. Up to 85% of your Social Security benefit is taxable if you’re single and have more than $34,000 of income, or if you’re married filing jointly with an income above $44,000.
If you’re claiming benefits as a current spouse or ex-spouse, your Social Security maxes out at your full retirement age, rather than age 70.
When Should You Apply for Social Security?
You can apply for Social Security up to four months before you want your benefit to start. If you’re holding out for the maximum benefit, you’d receive your first Social Security check the month after your 70th birthday. So if your birthday is in July, you could apply as early as April. Your first payment would arrive in August.
You don’t need to apply four months early, though. It typically takes the Social Security Administration about six weeks to process a new application. The fastest way to start your benefit is to apply online.
Should You Wait Until 70 for Social Security?
Choosing when to start Social Security is a big decision. Financial planners often advise waiting as long as possible to maximize benefits. But as of 2018, just 4.1% of men and 5.9% of women waited until age 70.
There’s no simple answer about when you should claim. But generally, starting Social Security early makes more sense if your health is poor, whereas you’d want to delay if your health is excellent.
Of course, taking benefits sooner may be a necessity. If you’ve been forced to retire early, taking a reduced Social Security benefit is better than going into debt or putting off medical care because you can’t afford it. Even if you’re not in dire need of the money, collecting benefits earlier may improve your quality of life in retirement.
There are a lot of factors to consider before applying for Social Security. Waiting until 70 yields the biggest monthly checks, but for many retirees, holding out for the maximum benefit simply isn’t feasible.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected] or chat with her in The Penny Hoarder Community.