The debate over the benefits and drawbacks of delaying Social Security intensified this week after new research suggested that waiting until age 70, long considered a sound financial strategy, could leave some retirees financially vulnerable. Economists and policy analysts said the decision depends heavily on health, longevity expectations, and access to other income sources.
Delaying Social Security
| Key Fact | Detail / Statistic |
|---|---|
| Maximum benefit increase for delaying to age 70 | About 8% per year after full retirement age |
| Share of retirees claiming before full retirement age (2023) | Approximately 45% |
| Average life expectancy for Americans at age 65 | 18.3 years for men, 20.8 years for women |
| Official Website | U.S. Social Security Administration |
Several nonprofit groups and university research centers plan to release updated analyses on claiming behavior later this year, offering more insight into how demographic changes influence retirement choices. Policymakers say they expect renewed public debate as more Americans reach retirement age.
Weighing the Benefits and Downsides of Delaying Social Security
Financial planners have long encouraged retirees to postpone claiming Social Security benefits to secure a larger monthly payout. The U.S. Social Security Administration (SSA) notes that benefits grow by roughly 8% each year after full retirement age until 70, the maximum deferral point.
But new analysis published by the nonprofit Boston College Center for Retirement Research argues that the strategy may not best serve individuals with limited savings or health challenges. “The advantage of waiting disappears quickly when people lack the resources to bridge the income gap,” said Dr. Alicia Munnell, the center’s director, in an interview with Reuters.
Income Gaps Create Pressures for Early Claiming
Many Americans rely heavily on Social Security as a primary source of retirement income. The SSA reports that for about one in four retirees, the benefit represents nearly all household income.
This reliance can make retirement planning challenging. Individuals who lose a job, face unexpected medical bills, or lack adequate savings may feel compelled to claim early. “For people without financial flexibility, waiting until age 70 can mean several years of drawing down limited assets,” said Nancy Altman, president of Social Security Works.
Economists add that this dynamic often deepens wealth inequality. A study by the Urban Institute found that low-income workers typically claim earlier due to financial necessity, while higher-income workers delay and collect larger lifetime benefits. “The structure of the program unintentionally rewards those with more resources and better health,” said Richard Johnson, a senior fellow at the institute.
Health and Longevity Play a Critical Role
Actuaries emphasize that delaying benefits provides the greatest advantage when retirees expect to live well into their 80s or beyond. The CDC reports that average U.S. life expectancy has declined slightly in recent years due to chronic illness and pandemic-related mortality.
“Delaying only pays off if you live long enough to enjoy the higher payments,” said Dr. Anya Sharma, a senior fellow at the Brookings Institution. “For individuals with serious health conditions, early claiming may produce more lifetime income.”
Recent mortality data illustrates the uncertainty many older Americans face. According to research from the National Institute on Aging, chronic conditions such as diabetes, cardiovascular disease, and cancer disproportionately affect lower-income households, increasing the risk that delaying could reduce lifetime benefits.
The Break-Even Point Isn’t Universal
Analysts often describe a “break-even age,” typically between 78 and 82, when cumulative payments from delaying surpass earlier claiming. However, experts caution that this calculation varies widely based on marital status, taxes, and cost-of-living adjustments.
The National Bureau of Economic Research (NBER) found that households with shorter life expectancies, limited savings, or higher medical expenses are less likely to see long-term financial gains from postponing benefits. For many, reaching the break-even point may be unrealistic.
Another factor is the unpredictable nature of long-term care expenses. According to the Department of Health and Human Services, more than 60% of Americans will require some form of long-term care during their lives. These costs, often exceeding $50,000 per year, can erode savings quickly, forcing retirees to rely on Social Security sooner than anticipated.
Impact on Spouses and Survivors
Couples face additional layers of complexity. The SSA calculates survivor benefits based on the higher-earning spouse’s claiming decision. Delaying can protect the surviving partner, but it may also strain the couple during the deferral period.
“Optimizing for survivor benefits is important,” said Professor Olivia Mitchell, a retirement expert at the University of Pennsylvania’s Wharton School. “But couples must weigh that against near-term financial needs.”
A 2022 survey by the Employee Benefit Research Institute (EBRI) found that couples frequently misunderstand how spousal benefits work. Nearly half of respondents incorrectly believed that both partners’ benefits grow at the 8% annual rate associated with delaying to age 70. In reality, only the higher-earning spouse’s benefit grows at that pace.
Policy Considerations and the Future of Social Security
The debate over claiming at age 70 comes amid broader concerns about the long-term sustainability of the Social Security Trust Fund. The Congressional Budget Office (CBO) projects that the fund will face depletion by the mid-2030s without legislative action. Analysts note that uncertainty about future benefits contributes to earlier claiming behaviors.
Lawmakers from both parties have introduced proposals aimed at stabilizing the system, though none have advanced to a full vote. Analysts say the political environment has made major reform unlikely in the near term.
The SSA’s most recent Trustees Report warns that if Congress fails to act, retirees could face benefit reductions of up to 23%. While experts caution that such a cut remains hypothetical, the risk influences public sentiment. A Pew Research Center poll showed that 74% of Americans doubt the program will provide full benefits by the time they retire.
How Retirees Can Make an Informed Decision
Experts recommend that individuals evaluate three key factors before delaying Social Security:
- Current and future health expectations
- Savings, pension income, and ability to cover expenses before age 70
- Family history of longevity and spousal benefit considerations
Retirees are also encouraged to consult certified financial planners. “A personalized analysis is essential,” said Jason Fichtner, chief economist at the Bipartisan Policy Center. “A strategy that works for a healthy dual-income household may harm someone with limited resources.”
In addition, specialists advise retirees to consider part-time work or phased retirement. According to the AARP Public Policy Institute, nearly 40% of older adults express interest in part-time employment to help bridge income gaps before claiming benefits. However, experts warn that age discrimination and limited job opportunities may make this difficult for many.
The Role of Behavioral Economics
Researchers say psychology also influences claiming decisions. A report from the University of Michigan Retirement Research Center found that many retirees prefer immediate, predictable income even when delayed benefits offer higher long-term returns.
“People value certainty during retirement,” said Dr. Jonathan Skinner, co-author of the study. “The anxiety associated with spending down savings can push individuals toward earlier claiming.”
This behavioral pressure is especially strong in periods of economic volatility, such as inflation spikes or market downturns. The Federal Reserve reported in 2023 that nearly one-third of households headed by someone aged 60 or older lacked sufficient emergency savings to cover three months of expenses.
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State-Level Differences and Inequities
Regional differences also play a role in longevity and economic security. Life expectancy varies by as much as ten years between states, according to the National Center for Health Statistics. Residents in states with lower life expectancies—such as Kentucky, Mississippi, and West Virginia—face a higher risk of losing out financially by delaying.
Furthermore, state tax laws significantly influence real benefit values. Thirteen states tax Social Security income to varying degrees, which can reduce net payments for those waiting until 70. “Where you live matters,” said David John, a senior policy analyst at the AARP. “State-level taxes and cost-of-living differences can shift the optimal claiming age.”
FAQs About The Hidden Risk of Delaying Social Security Until Age 70
Does delaying always increase lifetime income?
Not necessarily. It increases monthly payments, but lifetime income depends on life expectancy and financial circumstances.
Are cost-of-living adjustments affected by claiming age?
No. COLAs apply regardless of when benefits are claimed.
Do most Americans delay until 70?
No. Most claim between 62 and 67, according to the Social Security Administration.
