“Wait until 70 to claim Social Security and you’ll maximize your benefits!”

You’ve heard this advice everywhere. Financial planners say it. Retirement blogs repeat it. Online calculators recommend it.

And for many people, it’s wrong.

Not because delaying is inherently bad, but because “maximize your Social Security benefit” and “maximize your retirement outcome” are not the same thing.

Optimizing Social Security claiming depends on:

  • Your life expectancy (health status, family history, lifestyle)
  • Whether you’re married (spousal and survivor benefits change everything)
  • Your portfolio size (how much you need Social Security)
  • Your tax situation (Social Security is taxable income)
  • IRMAA implications (Social Security counts toward Medicare surcharges)
  • Other income sources (pension, rental income, portfolio withdrawals)
  • Legacy goals (do you care about leaving money to heirs?)

Let me show you why the “always delay to 70” advice is oversimplified and how to actually optimize your claiming strategy.

Social Security Basics: How Benefits Work

Full Retirement Age (FRA)

Your Full Retirement Age depends on your birth year:

  • Born 1943-1954: FRA = 66
  • Born 1955: FRA = 66 + 2 months
  • Born 1956: FRA = 66 + 4 months
  • Born 1957: FRA = 66 + 6 months
  • Born 1958: FRA = 66 + 8 months
  • Born 1959: FRA = 66 + 10 months
  • Born 1960 or later: FRA = 67

At FRA, you receive 100% of your Primary Insurance Amount (PIA).

Early Claiming (Age 62 to FRA)

You can claim as early as 62, but with permanent reductions:

For someone with FRA of 67:

  • Claim at 62: 70% of FRA benefit (30% reduction)
  • Claim at 63: 75% of FRA benefit (25% reduction)
  • Claim at 64: 80% of FRA benefit (20% reduction)
  • Claim at 65: 86.7% of FRA benefit (13.3% reduction)
  • Claim at 66: 93.3% of FRA benefit (6.7% reduction)
  • Claim at 67: 100% of FRA benefit

The reduction is ~5/9 of 1% for each month before FRA (up to 36 months), then 5/12 of 1% for each additional month.

Delayed Claiming (FRA to Age 70)

For each month you delay past FRA, you earn delayed retirement credits:

Increase: 8% per year (2/3 of 1% per month)

For someone with FRA of 67:

  • Claim at 67: 100% of FRA benefit
  • Claim at 68: 108% of FRA benefit (+8%)
  • Claim at 69: 116% of FRA benefit (+16%)
  • Claim at 70: 124% of FRA benefit (+24%)

No additional benefit for delaying past 70. Claiming at 71 gives you the same monthly benefit as 70, but you lost 12 months of payments.

The Math Example

Assume FRA benefit: $3,000/month at age 67

Claiming Age Monthly Benefit Annual Benefit % of FRA
62 $2,100 $25,200 70%
65 $2,600 $31,200 86.7%
67 (FRA) $3,000 $36,000 100%
70 $3,720 $44,640 124%

At first glance: Waiting to 70 gives you $19,440 more per year than claiming at 62.

But: By age 70, the person who claimed at 62 has already received $201,600 in benefits. The person who waited has received $0.

The question: Will the higher monthly amount make up for 8 years of zero income?

The Break-Even Analysis Everyone Gets Wrong

Financial advisors love to show break-even ages:

“If you claim at 62 vs 70, you break even at age 80!”

The implication: Live past 80 → wait until 70. Die before 80 → claim at 62.

This analysis is incomplete because it ignores:

What Ignored Factor 1: Time Value of Money

Money received today is worth more than money received later.

Proper analysis needs to discount future benefits to present value.

Example:

  • Claiming at 62: $25,200/year starting immediately
  • Claiming at 70: $44,640/year starting in 8 years

If you invest the early benefits at 5% return:

Age 70 portfolio value from age 62-70 benefits:

  • $201,600 received over 8 years
  • Invested at 5%: ~$236,000

To catch up, the age-70 claimer needs:

  • $236,000 ÷ ($44,640 - $25,200 annual difference) = 12.1 years
  • Break-even age: 82.1 years (not 80)

And that’s assuming 5% returns. At 7% returns, break-even pushes to age 84+.

What Ignored Factor 2: Portfolio Impacts

Scenario A: Claim at 62

  • Social Security: $25,200/year
  • Portfolio withdrawals needed: Less
  • Portfolio continues growing
  • More wealth at death for heirs

Scenario B: Claim at 70

  • Social Security: $0 for 8 years
  • Portfolio withdrawals needed: More
  • Portfolio depleted during waiting period
  • Less wealth at death

Real example:

Retiree with $1M portfolio, needs $60k/year:

Claim at 62:

  • SS provides $25k
  • Withdraw $35k from portfolio
  • After 8 years: Portfolio ~$950k (assuming 6% growth, 3% inflation)

Claim at 70:

  • SS provides $0
  • Withdraw $60k from portfolio
  • After 8 years: Portfolio ~$720k

The person who waited to 70 has $230k less in portfolio at age 70.

Now both receive Social Security. But one has a much larger portfolio to continue growing. At death, there’s potentially $500k+ difference in legacy value.

If you care about leaving money to heirs, claiming early might be optimal even if you live to 95.

What Ignored Factor 3: Tax Implications

Social Security is taxable income (up to 85% of benefits).

More Social Security = more taxable income = higher taxes.

Example:

Married couple, age 70:

Scenario A: Claimed at 62, getting $50k combined SS

  • Other income: $40k (small portfolio withdrawals)
  • Taxable SS: ~$33k (85% of $39k provisional income above thresholds)
  • Total taxable income: $73k
  • After standard deduction: ~$44k taxable
  • Federal tax: ~$5,000

Scenario B: Claimed at 70, getting $62k combined SS

  • Other income: $28k (smaller portfolio after early depletion)
  • Taxable SS: ~$42k (85% of $48k)
  • Total taxable income: $70k
  • After standard deduction: ~$41k taxable
  • Federal tax: ~$4,600

Wait - the tax is lower with higher SS?

Yes, because portfolio is smaller (you drew it down during delay period). You have less flexibility in retirement.

But also consider:

  • Higher SS = closer to IRMAA thresholds
  • Higher SS = less room for Roth conversions
  • Higher SS = potentially higher lifetime taxes

The “optimal” strategy depends on your total tax picture, not just Social Security alone.

What Ignored Factor 4: IRMAA Surcharges

Remember IRMAA from our previous post? Social Security counts toward MAGI.

For couples near $206k MAGI threshold:

Taking higher Social Security (by delaying to 70) could push you over IRMAA cliffs, costing $3,000-5,000/year in Medicare surcharges.

Example:

  • Claim at FRA (67): $36k SS
  • Other income: $165k
  • MAGI: $201k (safe, below IRMAA)

vs

  • Claim at 70: $45k SS (+$9k more)
  • Other income: $165k
  • MAGI: $210k (triggered first IRMAA tier)
  • Additional cost: $3,356/year in Medicare premiums

The extra $9k in Social Security costs you $3,356 in IRMAA. Your net gain is only $5,644.

Plus: You gave up 3 years of benefits ($108k) to get this “raise.”

When Delaying to 70 Actually Makes Sense

I’m not saying “never delay to 70.” I’m saying “don’t automatically delay without analyzing your specific situation.”

Delay to 70 makes sense when:

1. You Have Excellent Longevity Prospects

Factors suggesting long life:

  • Family history of longevity (parents lived to 90+)
  • Excellent health, no chronic conditions
  • Healthy lifestyle (never smoked, healthy weight, exercise regularly)
  • Access to quality healthcare
  • Female (women live ~5 years longer on average)

If you expect to live to 95+, delayed claiming wins on pure math.

Life expectancy calculators:

  • Average 65-year-old man: Lives to ~83
  • Average 65-year-old woman: Lives to ~86
  • Healthy 65-year-old: Add 3-5 years

But: 50% of people die before these ages. Break-even analysis assumes you’re in the lucky half.

2. You’re Married and You’re the High Earner

This is the strongest case for delaying.

When the first spouse dies, the surviving spouse keeps the HIGHER of the two Social Security benefits.

Example:

Husband (high earner):

  • FRA benefit: $3,500/month
  • Age 70 benefit: $4,340/month

Wife (lower earner):

  • FRA benefit: $1,800/month
  • Claims at 67

Scenario A: Husband claims at 67

  • While both alive: $5,300/month combined
  • After husband dies: Wife gets $3,500/month (widow benefit)

Scenario B: Husband delays to 70

  • While both alive: $6,140/month combined (+$840)
  • After husband dies: Wife gets $4,340/month (widow benefit, +$840)

The widow benefit locks in forever. If wife lives 20 more years after husband’s death, that’s $201,600 additional lifetime benefit.

Rule of thumb: The higher earner should strongly consider delaying to 70 to maximize survivor benefits. The lower earner can claim earlier.

3. You Have Minimal Portfolio Assets

If you have little retirement savings and will rely heavily on Social Security:

  • $200k portfolio → Social Security is 70%+ of your income
  • Delaying to maximize benefits makes sense
  • You don’t have portfolio flexibility anyway

If you have significant portfolio assets:

  • $2M portfolio → Social Security is 20-30% of your income
  • You have flexibility to optimize for taxes, IRMAA, legacy
  • Delaying may not be optimal

4. You’re Still Working Before FRA

If you claim before FRA while still earning income, your benefits are reduced:

2025 earnings test:

  • Earn above $23,400/year → Lose $1 in benefits for every $2 earned
  • Year you reach FRA: Higher threshold, then disappears

If you’re working at 62-65, there’s little point in claiming early - you’ll lose most benefits to the earnings test anyway.

Better: Keep working, delay claiming, maximize your benefit.

5. You Want to Maximize Guaranteed Income

Some people value guaranteed income over portfolio flexibility.

Psychological benefit of higher Social Security:

  • Larger “pension-like” guaranteed income
  • Less worry about portfolio performance
  • Simplifies retirement budgeting

This is a preference, not pure math optimization.

If having $3,720/month guaranteed vs $2,600/month gives you significant peace of mind, the psychological benefit might outweigh the financial optimization.

When Claiming Early (62-65) Makes Sense

Claim early when:

1. Poor Health or Shorter Life Expectancy

Be honest about your health prospects:

  • Chronic conditions (heart disease, diabetes, COPD)
  • Family history of early death
  • Lifestyle factors (smoking, obesity, high stress)
  • Already diagnosed with serious illness

If you don’t expect to reach 80, claiming early is likely optimal.

You’ll receive benefits while you’re healthy enough to enjoy them, rather than optimizing for longevity you won’t achieve.

2. You’re Single (No Survivor Benefit Considerations)

Without a spouse, the survivor benefit rationale disappears.

Single people should focus on:

  • Personal life expectancy
  • Portfolio optimization
  • Tax efficiency
  • Legacy goals (if any)

For single people, claiming at FRA (67) often makes more sense than waiting to 70 - you capture most of the delayed credits without the 3-year wait.

3. You Want to Preserve Portfolio Assets

If your goal is leaving wealth to heirs:

Claiming early + preserving portfolio often beats delayed claiming.

Example over 30-year retirement:

Claim at 62:

  • Lower SS benefits
  • Smaller portfolio withdrawals
  • Portfolio grows to $2.5M by death
  • Heirs receive $2.5M

Claim at 70:

  • Higher SS benefits
  • Larger portfolio withdrawals ages 62-70
  • Portfolio grows to $1.8M by death
  • Heirs receive $1.8M

Difference: $700k more to heirs with early claiming

(Even though you received lower Social Security)

4. You Can Invest the Early Benefits at High Returns

If you’re confident in investment returns:

Taking benefits at 62 and investing them can outperform waiting.

Example:

  • Claim at 62: $2,100/month ($25,200/year)
  • Invest all of it for 8 years at 8% return
  • Age 70 portfolio: ~$280,000

The person who waited to 70:

  • Started receiving $3,720/month at age 70
  • Difference: $1,620/month vs the age-62 claimer

Time for age-70 claimer to catch up:

  • $280,000 ÷ ($1,620/month × 12) = 14.4 years
  • Break-even age: 84.4

And the age-62 claimer still has ongoing $2,100/month plus portfolio growth from the $280k.

This math heavily favors early claiming if you can achieve strong returns and don’t need the money for living expenses.

5. You’re in High Tax Brackets Now, Lower Later

If you’re still working at 62-65 in high tax brackets:

Normally you wouldn’t claim early. BUT if you know your taxes will drop dramatically soon:

Example:

  • Age 62, still working, $150k salary
  • Social Security would be taxed at 22-24% bracket

  • Don’t claim yet

  • Age 64, retire, income drops to $50k
  • Social Security now taxed at 12% bracket
  • Claim now

Claiming when you enter lower brackets minimizes lifetime taxes on Social Security.

Spousal Claiming Strategies

For married couples, claiming strategy becomes much more complex.

Strategy 1: Lower Earner Claims Early, Higher Earner Delays

This is often optimal for married couples.

Example:

Wife (lower earner, FRA benefit $1,800):

  • Claims at 67 (FRA): $1,800/month

Husband (higher earner, FRA benefit $3,500):

  • Delays to 70: $4,340/month

While both alive: $6,140/month combined

After husband dies: Wife switches to widow benefit of $4,340/month

Benefits:

  • Maximized survivor benefit for potentially 20+ years
  • Still receiving some Social Security during ages 67-70 (wife’s benefit)
  • Not depleting portfolio as much during delay period

Strategy 2: Both Claim at FRA

Sometimes the “middle way” is optimal:

  • Both claim at 67 (FRA)
  • Avoid years of zero/reduced benefits
  • Preserve portfolio
  • Capture most of delayed retirement credits without the extremes

This works well when:

  • Both spouses have similar life expectancy
  • Portfolio is moderate size (not huge, not tiny)
  • Tax situation benefits from lower SS income
  • Don’t want complexity of split strategy

Strategy 3: Restricted Application (Mostly Eliminated)

Prior to 2015, you could:

  • File a “restricted application” for spousal benefits only
  • Let your own benefit grow to 70
  • Then switch to your own higher benefit

This strategy was eliminated for anyone born after January 1, 1954.

If you were born before that, you might still use this strategy, but most people reading this are too young.

Strategy 4: File and Suspend (Eliminated)

This strategy allowed one spouse to file for benefits, then immediately suspend, allowing the other to claim spousal benefits while the first spouse’s benefit grew.

Eliminated in 2015. Can’t do this anymore.

Current rule: If you suspend your benefits, your spouse can’t receive spousal benefits during the suspension.

How Taxes Change Your Optimal Claiming Age

Social Security is taxed on a strange “provisional income” system:

Provisional Income = AGI + ½ of Social Security + tax-exempt interest

Taxation thresholds (Married Filing Jointly):

  • Provisional income ≤ $32,000: 0% of SS taxable
  • $32,000 - $44,000: Up to 50% of SS taxable

  • $44,000: Up to 85% of SS taxable

For most retirees with other income, 85% of SS is taxable.

Tax Optimization Strategy: Coordinate SS with Roth Conversions

Years 60-66 (before SS):

  • Low income years
  • Perfect for Roth conversions
  • Fill up 12% and 22% brackets
  • Pay low taxes on conversions

Years 67-72 (SS started, before RMDs):

  • Social Security income
  • Less room for Roth conversions
  • But still some flexibility

Years 73+ (SS + RMDs):

  • High income from combined sources
  • Minimal room for planning
  • Pay higher taxes

Implication: If you want to do large Roth conversions, delaying Social Security to 70 might make sense - it gives you 3 extra low-income years for conversions.

The IRMAA Interaction

Taking Social Security earlier (smaller benefit) might help you stay under IRMAA thresholds.

Example:

Claim at 67: $36k SS + $165k other = $201k MAGI (safe)

Claim at 70: $45k SS + $165k other = $210k MAGI (IRMAA triggered)

The extra $9k in SS costs you $3,356 in Medicare premiums = only net $5,644 benefit.

And you gave up 3 years of payments to get it.

How to Actually Model Your Optimal Strategy

Don’t rely on rules of thumb. Model YOUR specific situation:

Inputs You Need:

  1. Your earnings record (get from ssa.gov)
  2. Spouse’s earnings record (if married)
  3. Health assessment (realistic life expectancy)
  4. Portfolio size and allocation
  5. Other retirement income (pension, rental, etc.)
  6. Tax situation (current and projected)
  7. Retirement spending needs

Scenarios to Model:

For single people:

  • Claim at 62
  • Claim at FRA (67)
  • Claim at 70
  • Compare portfolio values, lifetime income, taxes, legacy

For married couples:

  • Both claim at 62
  • Both claim at FRA
  • Both claim at 70
  • Lower earner at FRA, higher earner at 70
  • Higher earner at FRA, lower earner at 62
  • Various combinations

What to Compare:

✓ Total lifetime benefits received
✓ Portfolio value at death
✓ Lifetime taxes paid
✓ IRMAA costs
✓ Survivor income (for married couples)
✓ Break-even age with time-value-of-money discount
✓ Legacy value for heirs
✓ Guaranteed income vs portfolio risk exposure

A comprehensive model should show you all of these factors simultaneously.

Common Social Security Mistakes

Mistake 1: Using Break-Even Age Without Time Value of Money

The error: “I break even at 80, so I should wait to 70!”

The problem: Ignores opportunity cost of early benefits invested.

Better: Discount future benefits to present value and compare.

Mistake 2: Ignoring Survivor Benefits (Married Couples)

The error: Both spouses claim at 62 to “maximize early income.”

The problem: Lower survivor benefit for potentially 20+ years.

Better: Higher earner delays to 70, lower earner can claim earlier.

Mistake 3: Not Checking Your Earnings Record

The error: Assuming SSA has accurate records.

The problem: Errors happen. Missing years, incorrect earnings, identity theft.

Better: Check ssa.gov annually. Correct errors BEFORE you claim.

You have 3 years, 3 months, and 15 days to correct earnings errors. After that, it’s difficult/impossible.

Mistake 4: Claiming Early While Still Working

The error: Claiming at 62 while earning $60k/year.

The problem: Earnings test eliminates most benefits. You permanently reduced your benefit for nothing.

Better: Wait until you actually stop working to claim.

Mistake 5: Not Coordinating with Roth Conversions

The error: Claiming SS at 62, then trying to do Roth conversions ages 62-70.

The problem: SS income reduces room for conversions. You’re paying taxes on conversions at higher rates.

Better: Delay SS to 67-70, do aggressive Roth conversions during low-income years, then start SS.

Mistake 6: Optimizing for the Wrong Goal

The error: “I want to maximize my Social Security benefit!”

The question: Why?

What you actually want to maximize:

  • Retirement security?
  • Lifetime income?
  • Wealth at death?
  • Guaranteed income?
  • Tax efficiency?

Different goals have different optimal claiming ages.

Special Situations

Divorced Individuals

If you were married for 10+ years, you may be entitled to spousal benefits on your ex-spouse’s record.

Rules:

  • Must have been married 10+ years
  • Currently unmarried (remarriage ends this benefit)
  • Ex-spouse must be at least 62
  • Your benefit based on ex-spouse must be higher than your own

You can claim on ex-spouse’s record without their knowledge or permission.

This is underutilized - many divorced people don’t know they qualify.

Widow/Widower Benefits

Survivor benefits have different rules:

  • Can claim reduced survivor benefits as early as 60 (or 50 if disabled)
  • Can switch between survivor and your own benefit later
  • Common strategy: Claim survivor benefit at 60, let your own benefit grow to 70, then switch

Government Pension Offset (GPO)

If you receive a government pension from work where you didn’t pay Social Security taxes (some teachers, police, firefighters):

Your spousal or survivor SS benefits are reduced by 2/3 of your pension amount.

Example:

  • Government pension: $3,000/month
  • Spousal SS benefit: $1,500/month
  • GPO reduction: $2,000 (2/3 of $3,000)
  • Actual spousal benefit: $0 (reduced to zero)

This catches many retired government workers by surprise.

Windfall Elimination Provision (WEP)

If you have both non-covered government pension and Social Security from other work:

Your SS benefit is reduced (not eliminated).

The reduction depends on your earnings history and pension amount.

The Bottom Line on Social Security

There is no universal “best” claiming age.

  • Delay to 70 is optimal for some people (healthy, married high earners, minimal portfolio)
  • Claim early is optimal for others (poor health, single, large portfolio, tax optimization)
  • Claim at FRA is often a reasonable compromise

To find YOUR optimal strategy:

  1. Model your specific situation with real numbers
  2. Consider life expectancy honestly
  3. Account for spousal/survivor benefits
  4. Factor in taxes and IRMAA
  5. Include portfolio impacts
  6. Align with your actual goals (security vs legacy vs tax efficiency)

And remember: You can’t optimize Social Security in isolation. It interacts with:

  • Portfolio withdrawal strategy
  • Roth conversion planning
  • Tax bracket management
  • IRMAA thresholds
  • Medicare enrollment timing
  • RMD planning

All of these need to be modeled together, not separately.

Want to model your optimal Social Security claiming strategy? Download Fatboy Financial Planner and compare different claiming ages with full tax, IRMAA, and portfolio impact analysis. See your break-even ages with proper time-value-of-money accounting. Optimize for YOUR goals, not generic rules of thumb.

Because the right claiming decision could be worth $100,000+ over your retirement.

Questions about Social Security optimization? Email: fbfinancialplanner@gmail.com

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