Understanding the Power of Waiting Until Age 70
Deciding when to claim Social Security is one of the most significant financial decisions you'll make for your retirement. While you can start receiving benefits as early as age 62, waiting can dramatically increase your monthly payout. For those wondering, "What will my Social Security benefit be at age 70?" the answer is simple: it will be at its maximum potential. By delaying your claim beyond your Full Retirement Age (FRA), you earn valuable delayed retirement credits that permanently boost your income.
What is Full Retirement Age (FRA)?
Your Full Retirement Age is the age at which you are entitled to 100% of your primary insurance amount (PIA), which is the benefit calculated from your lifetime earnings. Your FRA is determined by your birth year.
- For those born between 1943 and 1954: FRA is 66.
- For those born in 1955-1959: FRA gradually increases from 66 and 2 months to 66 and 10 months.
- For those born in 1960 and later: FRA is 67.
Claiming before your FRA results in a permanently reduced benefit. Claiming after your FRA results in a permanently increased benefit, up until age 70.
The Magic of Delayed Retirement Credits
For every month you postpone claiming benefits past your FRA, the Social Security Administration (SSA) adds a credit to your eventual payout. These are known as Delayed Retirement Credits (DRCs). The credits accrue at a rate of two-thirds of 1% per month, which equals 8% for each full year you wait.
Here’s how it works for someone with an FRA of 67:
- Wait one year (to age 68): Your benefit will be 108% of your PIA.
- Wait two years (to age 69): Your benefit will be 116% of your PIA.
- Wait three years (to age 70): Your benefit will be 124% of your PIA.
These credits stop accumulating at age 70, so there is no financial advantage to delaying your claim beyond that point.
Benefit Comparison: Claiming at 62, FRA (67), and 70
To illustrate the impact of your claiming decision, let's consider a hypothetical example. Assume your PIA—the monthly benefit you would receive at your Full Retirement Age of 67—is $2,000.
| Claiming Age | Relation to FRA (67) | Percentage of Full Benefit | Estimated Monthly Payout |
|---|---|---|---|
| 62 | 5 years early | 70% | $1,400 |
| 67 | At FRA | 100% | $2,000 |
| 70 | 3 years late | 124% | $2,480 |
As the table shows, waiting from age 62 to 70 results in a monthly benefit that is nearly 77% higher. Over the course of a long retirement, this difference can amount to tens or even hundreds of thousands of dollars.
How to Estimate Your Personal Benefit at Age 70
While examples are helpful, your benefit is unique to your earnings history. The most accurate way to project your future income is to use the tools provided by the Social Security Administration.
- Create a my Social Security Account: The single best resource is the official SSA website. You can create a free and secure my Social Security account to view your complete earnings record and get personalized estimates for claiming at ages 62, your FRA, and 70.
- Review Your Earnings Statement: Your statement shows your earnings for each year and projects your benefits based on your current record. Ensure the information is accurate, as your benefit is calculated based on your 35 highest-earning years.
- Use the SSA Calculators: The SSA website offers various retirement calculators that allow you to run different scenarios, such as factoring in future earnings or different retirement dates.
Factors to Consider Before Delaying
Maximizing your monthly benefit is a powerful strategy, but it isn't the right choice for everyone. Before deciding to wait until 70, consider these factors:
- Health and Life Expectancy: If you have health concerns or a shorter-than-average life expectancy, claiming earlier may result in a higher lifetime payout.
- Financial Need: If you need the income to cover living expenses, claiming earlier might be a necessity rather than a choice.
- Spousal and Survivor Benefits: Your claiming decision can impact the benefits your spouse may receive, both while you are alive and as a survivor. A higher benefit for you can mean a higher survivor benefit for them.
- Market Conditions: Some people claim earlier and invest the money, hoping to outperform the 8% annual return offered by delayed credits. This strategy comes with market risk, whereas DRCs are a guaranteed, risk-free return.
Conclusion: A Strategic Decision for a Secure Future
Ultimately, understanding what your Social Security benefit will be at age 70 is about recognizing the significant, guaranteed growth available to you. By waiting, you are essentially purchasing a higher, inflation-protected annuity for the rest of your life. For many retirees, this provides a foundational level of financial security that is difficult to replicate through other means. Carefully analyze your personal situation, use the official SSA tools, and consider consulting a financial advisor to make the best choice for your long-term well-being.
