It’s an unfortunate but known fact that many older Americans kick off retirement with little to no savings. The Federal Reserve reports that as of 2022, the median retirement plan balance among seniors aged 65 to 74 was only $200,000. And while a strong stock market may have raised that number since that data was collected, the reality is that many retirees today have minimal savings given their life expectancies.

For this reason, a large number of people entering retirement will end up extremely reliant on Social Security to cover their expenses. And people without savings are often advised to try to squeeze as much money as possible out of the program.

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For you, that might mean delaying your Social Security claim until age 70. And that’s not a bad strategy in theory. In practice, though, here’s why it may not work out.

When you short yourself on lifetime income

Delaying Social Security past full retirement age results in a boosted monthly benefit for life. If your full retirement age is 67, which is the case for anyone born in 1960 or later, then you have an opportunity to increase your monthly Social Security paychecks by 24% by signing up at age 70. That’s an appealing thing when you’re shy on savings.

But delaying Social Security also carries risk. You may get more money on a monthly basis, but whether that happens on a lifetime basis is up in the air. That’s because you need to live long enough to make up for those years of not collecting a monthly benefit when you could have.

Now you’ll often hear the advice to rely on your health as an indicator of when to claim Social Security. And the logic tends to go that if your health is strong, then it makes sense to delay Social Security for a higher monthly check. If you’re in great health, you’re more likely to live a long enough life for a delayed filing to pay off.

But even healthy people can take a turn for the worse. They can get injured or sick and end up living shorter lives than expected. So pretty much no matter the circumstances, delaying Social Security means taking a gamble. The question is, is the promise of a higher monthly paycheck worth the risk?

That’s for you to decide.

How badly do you need the extra money?

If you’re not super confident that claiming Social Security at 70 is the right choice, you may want to ask yourself just how badly you need that boosted benefit. If you have some savings, you may tell yourself you’ll sign up for Social Security at full retirement age and forgo that increase. If you have no savings at all, you may come to a different decision.

Of course, for some seniors, the choice to delay Social Security until age 70 works out splendidly. But you’ll need to ask yourself whether you’re willing to risk getting shorted on lifetime income before you hold off on signing up. If you’d rather not take chances, then you may want to file for Social Security at your full retirement age and make peace with that decision.

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