Benefits Stop Increasing at Age 70
Once you reach age 70, the incentives for delaying your Social Security benefits, specifically Delayed Retirement Credits (DRCs), stop accumulating. For those born in 1943 or later, these credits add 8% per year to your benefit for each year you wait past your Full Retirement Age (FRA). However, delaying beyond 70 provides no further increase to your monthly payment; your maximum benefit amount is locked in at this age. Missing the age 70 deadline means forfeiting monthly payments you could have received with no corresponding increase in benefits.
Understanding Retroactive Payments
If you wait past age 70 to claim benefits, the Social Security Administration (SSA) allows you to receive a lump sum for up to six months of retroactive payments prior to your filing date. While this provides some back pay, it does not cover all the months you waited unnecessarily, resulting in a permanent loss of potential income.
How to Claim Retroactive Benefits
When you apply for benefits after age 70, you need to explicitly request retroactive payments. You can apply online at www.ssa.gov/retireonline, by phone, or in person at an SSA office. Having necessary documents ready can help streamline the process.
Financial Impact of Delaying Past 70
Delaying Social Security past age 70 has financial consequences. You receive fewer total payments over your lifetime, and this loss can be significant, particularly for those with a shorter life expectancy. The decision to delay is often based on the assumption that larger monthly checks will eventually recoup the missed payments, but this depends on individual longevity.
Effect on Spousal and Survivor Benefits
Your delayed retirement credits beyond your FRA do not increase your spouse's spousal benefits. However, these credits do increase the potential survivor benefits for your spouse. If you delay past 70 and then pass away, your spouse's survivor benefit is based on your highest possible amount, but your family will have missed your potential monthly income during the period you waited unnecessarily.
Key Considerations if You Are Over 70 and Haven't Filed
- Application Required: Benefits do not start automatically at age 70; you must file an application to receive them. An exception exists for those who previously suspended benefits.
- Medicare: If you are not yet on Medicare at 70, you should enroll at 65 to avoid penalties. If you are already enrolled and premiums are deducted from Social Security, you will need an alternative payment method if you delay your claim.
- Opportunity Cost: Waiting past 70 means forfeiting monthly income with no further benefit growth from the SSA.
Comparison of Claiming Options
| Feature | Claiming at Full Retirement Age (FRA) | Claiming at Age 70 | Claiming After Age 70 |
|---|---|---|---|
| Monthly Benefit | 100% of your primary insurance amount (PIA). | Highest possible monthly benefit, with Delayed Retirement Credits (DRCs). | No further increase in monthly benefit beyond the age 70 amount. |
| Lifetime Payments | More checks over a potentially longer period, but each is a smaller amount. | Fewer checks overall compared to claiming at FRA, but each check is larger. | Fewer checks than claiming at 70, with no corresponding increase in benefit amount. |
| DRC Accrual | Stops accumulating DRCs. | Stops accumulating DRCs, having maximized them. | Stops accumulating DRCs. No additional benefits for waiting. |
| Retroactive Pay | N/A | Possible for up to six months when you file. | Possible for up to six months when you file. |
Taking Action If You Are Over 70
If you are past age 70 and have not filed for Social Security, you should apply as soon as possible to begin receiving your maximum monthly benefit. The easiest way is to apply online at the SSA's website. You can also call the SSA or visit a local office, though contacting them ahead of time is recommended.
Conclusion
Delaying Social Security benefits past age 70 eliminates the opportunity to earn higher monthly payments through Delayed Retirement Credits. While limited retroactive payments are available, continuing to wait beyond 70 results in lost income and serves no financial advantage. To maximize your benefits, it is generally recommended to claim Social Security promptly at age 70.
