Personal Finance

Can't wait until 70? This is the next best age to claim Social Security benefits

Key Points
  • If you wait until age 70 to start receiving Social Security retirement benefits, you generally stand to get the biggest checks.
  • But if you do not want to delay for that long, there is a second option where you will not take as much of a pay cut.
  • Postponing benefits only makes sense for certain people, particularly those who are claiming based on their own work records and who expect to live a long time in retirement.
Patrick La Roque | Getty Images

By now, you may have heard: 70 is the best age for claiming Social Security benefits.

Here's why. Because you have already reached your full retirement age — age 66 or 67 for most — you'll receive 100% of the benefits you are entitled to. Plus, for every year you delay beyond your full retirement age, you stand to get a boost of up to 8% to your benefits. Exactly how much of an increase you get is calculated based on the year of your birth and the number of months you delay.

But that stops at age 70.

If you're like many individuals, you're counting down the days until retirement. And waiting until age 70 might sound like a long time.

The good news is that there is a next best age to claim.

The second best choice

Single Social Security claimants who want to hold off until age 70, but find they can’t quite wait any longer should select age 69 for the best trade off, according to Christopher Jones, chief investment officer at Edelman Financial Engines.

That sacrifice may be as little as a few thousand extra dollars in additional lifetime benefits in exchange for starting a year earlier, according to Jones.

“If you’re single, we’ll tell you you should wait until 70,” Jones said. “It is generally preferable to do so.

"But it’s not quite as critical as it is going from 66 to 67, or 67 to 68.”

In a low interest rate environment, it's hard to beat the potential increases for every year you delay claiming your benefits, Jones said.

“That’s a guaranteed real rate of return backed by the federal government,” Jones said. “You can’t get real rates of return at 6% to 8% right now — not even close — in the marketplace.”

Social Security myths
Social Security myths

Who should delay benefits

If you are married and the higher wage earner, it generally makes sense for you to wait as long as possible to claim.

One reason for that is Social Security payments are based on mortality tables that have not been updated since 1983. And life expectancies have increased since that time.

“People are living longer than they would have been expected to back in 1983, and therefore the credits that you get for delaying Social Security are worth more to you than they would be if they were actuarially fair,” Jones said.

Holding off until age 70 makes sense particularly for the higher earner of a married couple because their benefits will in turn determine spousal and survivor benefits for their significant other.

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For the lower-earning spouse, it generally does not pay to wait to claim beyond full retirement age, Jones said. That is because they have a choice between their own benefits or spousal or survivor benefits based on their spouse's record, whichever is higher. Often, the benefits they are eligible to receive through their spouse will exceed what they would get if they wait until age 70.

For single people, it is preferable to wait until 70 for the highest monthly checks. But those retirees have more flexibility — and a second best option.