2 Reasons Not to Claim Social Security at 70

Three reasons exist for not claiming Social Security benefits at the age of 67, despite being eligible to do so. The primary reason is the increase in monthly payments that results from delaying benefits. For each month delayed, a 0.66% boost is added to the benefit amount that would have been received if benefits had been claimed at full retirement age. This results in an 8% annual increase; however, the credit ceases once an individual reaches 70, at which point their benefit is 24% higher than if they had claimed at 67.

Another factor to consider is the impact on surviving spouse benefits. If an individual is married and has a higher income history, their spouse will also receive a higher survivors benefits payment upon the first individual's death. This effect is contingent on the specific circumstances and should be researched through the Social Security Administration.

Lastly, tax implications should be evaluated prior to initiating Social Security benefits. Delaying benefits may help keep the tax bill low if work-based wages still play a role in an individual's income at age 67. Moreover, this delay can allow for tax-efficient conversion of an ordinary IRA to a Roth IRA, potentially boosting retirement income.