Deciding when to draw Social Security can be one of the most important decisions a person can make.  There are different views on the topic.  Some say take it as early as possible while others think full retirement age (age 66 for those born from 1943 to 1954) is best to avoid reduction in benefits.  A smaller group believes that waiting as long as possible is the best choice to maximize benefits.  Only 6.5 percent of Social Security recipients put off collecting their benefits until they reach age 70, the age at which they can collect the maximum benefit.

First recognize that drawing Social Security at age 62 comes at a high price – 30 percent of your benefit amount.  Also recognize that if you are still working, there is an offset of benefits for earnings over $19,560 in 2022 until you reach full retirement age.  You will lose $1 for every $2 you earn over $19,560.  In the year you reach full retirement age you will lose $1 for every $3 you earn above $19,560.  Many think what is the use of drawing and then losing some of those benefits due to work earnings? 

The decision of how long to wait to claim Social Security benefits depends on a number of factors. Besides other income sources in retirement many look at projected longevity.  But Social Security experts advise waiting as long as possible to start collecting benefits, up to age 70.  This is because if you delay taking retirement beyond your full retirement age, you amass “delayed retirement credits” that increase your benefit by 8 percent for every year that you wait, over and above annual inflation adjustments.  Your checks will be about 76 percent more than had you claimed at age 62, the earliest you can file. It’s tough to find a better and more reliable investment than that.

However, keep in mind that if you are collecting benefits based on the work record of a current or ex-spouse, there is no point in waiting until 70 because you will not accrue delayed retirement credits beyond your full retirement age.

Don’t Wait Any Longer Than 70 to Draw Benefits

Delayed retirement credits stop at age 70, so there is no advantage to putting off starting benefits any longer.  Not only won’t your credits increase by claiming after age 70, but if you wait longer than half a year, you’ll start losing monthly benefits you would have otherwise received.  The Social Security Administration (SSA) will pay you retroactively for benefits accrued up to six months after your 70th birthday, but that’s it.  If you wait any longer, benefits you would have received are permanently forfeited.

Realize that the SSA won’t automatically start sending you checks once you turn 70 or any age. You need to apply for benefits. You can do this starting four months before the date that you want your benefits to begin.  To get the maximum amount, you’ll want the benefits to start the month you turn 70.  There is, however, one scenario where benefits will automatically kick in at 70: those who took benefits after reaching their full retirement age and then suspended their benefits to earn delayed credits until age 70.  For them, the SSA should automatically restart benefits at 70.

You can apply online — click here.  If you can’t submit your application online, you can call 1-800-772-1213 (TTY 1-800-325-0778). As of April 7, 2022, SS offices reopened, but going online can save you wait times to file an application.

When will you get your first check?  The SSA issues checks a month behind, so your benefits should start arriving the month after the month you turned 70.  For example, if you were born July 17, you should ask that your benefits start in July and your first check will come in August.  However, those born on the first day of the month get a small bonus: the SSA treats them as if they were born the previous month and starts paying benefits in their birth month.  So, for example, if you were born July 1, you’d request benefits to start in June and the payments would begin in July.

What If You’re Still Working at 70?

Working past age 70 (or any time past your full retirement age, in fact) won’t affect your benefits.  And while you won’t increase your monthly benefit by waiting past age 70 to claim, you could boost it by working in addition to collecting Social Security. This is because the SSA recalculates your benefits each December based on your 35 highest-earning years of work. If your earnings plus your Social Security benefits allow you to replace a lower-earning year, your overall benefit could increase in the annual calculation. But Social Security benefits are taxable, so if you’re earning more money your tax rate may be higher.

In most cases, your Medicare premiums will be deducted from your Social Security check. If you happen to be retiring at age 70 and you’ve been paying Medicare’s high-earner surcharges, keep in mind that you can reverse these surcharges if your income drops far enough. The Social Security Administration uses income reported two years ago to determine a beneficiary’s premiums. If your income decreases significantly due to certain circumstances, including retirement, you can request that the SSA recalculate your benefits and your premium surcharges could be eliminated or reduced. 

For the SSA’s Retirement Benefits page, click here.