{"id":287953,"date":"2025-11-12T22:51:13","date_gmt":"2025-11-12T22:51:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/287953\/"},"modified":"2025-11-12T22:51:13","modified_gmt":"2025-11-12T22:51:13","slug":"heres-why-delaying-social-security-until-70-could-cost-you-money","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/287953\/","title":{"rendered":"Here\u2019s Why Delaying Social Security Until 70 Could Cost You Money"},"content":{"rendered":"\n

If\u00a0you\u2019re\u00a0even casually thinking about your retirement plans<\/a>, you\u2019ve probably been bombarded with a common piece of advice: Wait until\u00a0age 70 to claim your Social Security benefits. On paper, it sounds like\u00a0a good idea\u00a0since\u00a0you\u2019ll\u00a0receive the highest possible monthly benefit. However, the best-laid plans that seem terrific on paper can sometimes fall flat in real life \u2014 depending on your circumstances. And delaying your Social Security benefits<\/a> is no exception.<\/p>\n

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According to D\u2019Andre Clayton<\/a>, co-founder of Clayton Financial Solutions<\/a>, delaying your benefits\u00a0isn\u2019t\u00a0always the wisest course of action. In certain situations, it could even end up costing you money. Clayton spoke with GOBankingRates as part of our Top 100 Money Experts<\/a>\u00a0series to explain why you shouldn\u2019t automatically follow the conventional advice on when to claim your benefits.<\/p>\n

Clayton has seen clients who were determined to wait until age 70 to claim their benefits<\/a> encounter\u00a0a rude reality: Sometimes, they\u00a0don\u2019t\u00a0reach the age to claim \u2014 or fully enjoy \u2014 those benefits. He calls this the \u201cbreak-even point.\u201d<\/p>\n

\u201cThe more likely consequence is the inability to survive long enough for the break-even point. For instance, if you waited until 70 instead of 65, your break-even point would be age 81 or 82,\u201d he said. \u201cHere\u2019s the issue with this: The average life expectancy for men is 75.8 years, while for women it\u2019s 81.1 years.\u201d<\/p>\n

In other words,\u00a0there\u2019s\u00a0a high likelihood that waiting until 70 may not pay off for everyone.<\/p>\n

Clayton explained that delaying benefits can also backfire when one spouse passes away prematurely.<\/p>\n

\u201cThe survivor may lose a Social Security check and then get pushed into a higher Income-Related Monthly Adjustment Amount (IRMAA)<\/a> tier due to required minimum distributions or capital gains \u2014 so the net income advantage evaporates,\u201d he said.<\/p>\n

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By embracing the traditional mindset that you must wait until 70 to claim Social Security benefits, you could lose the chance to invest or strategically deploy those funds earlier.<\/p>\n

\u201cBetween 62 and 70, those deferred payments could have been invested into Roth accounts<\/a>, Bitcoin<\/a> or anything else that could possibly yield more than what the deferred benefit could create,\u201d Clayton said.<\/p>\n

Story Continues <\/p>\n

When weighing the conventional approach to claiming Social Security at 70 against the upside of taking benefits earlier and investing them, Clayton also factors in the overall longevity of the program itself.<\/p>\n

\u201cWe also have to be realistic that Social Security has a predicted point where the Disability Insurance Trust Fund will be depleted,\u201d he said. \u201cI\u2019m not one to believe that will mean the end of Social Security \u2014 it\u2019s too interwoven into society \u2014 but it\u2019s possible that the expected amount or even the guaranteed increase for waiting could be adjusted to keep Social Security solvent.\u201d<\/p>\n

Essentially, you\u00a0could be giving up years of compounding potential for a \u201cguaranteed\u201d increase that never fully materializes.<\/p>\n

Clayton adds that many people forget Medicare premiums<\/a> are automatically deducted from their Social Security benefits \u2014 meaning their\u00a0net\u00a0benefit is what\u00a0remains\u00a0after health expenses. If your income rises from required minimum distributions, capital gains or part-time work, your IRMAA surcharges can increase your Medicare Part B and Part D premiums by hundreds of dollars per month.<\/p>\n

\u201cHeaven\u00a0forbid you haven\u2019t planned appropriately, and these things also push your income to another tax bracket,\u201d he said. \u201cThat\u2019s a tax on two sides \u2014 one you can clearly see and another that\u2019s a hidden tax on your retirement income.\u201d<\/p>\n

Clayton cautions that if you experience these higher IRMAA surcharges,\u00a0you\u2019re\u00a0no longer protected\u00a0by\u00a0the hold-harmless\u00a0provision, which prevents Medicare premiums from reducing your net monthly benefit.<\/p>\n

\u201cWith cost-of-living adjustment (COLA) being 2.5% and the Medicare Board projecting consistent inflation of future Medicare Part B premiums by 10% on average a year until further notice,\u00a0the hold-harmless provision could become the saving grace of your Social Security,\u201d he said.<\/p>\n

He notes that claiming earlier can help you manage these key thresholds more strategically. Taking Social Security at 65 instead of 70 can give you predictable income sooner, enabling you to time Roth conversions or annuity income before IRMAA brackets tighten.<\/p>\n

\u201cMedicare and Social Security are financially joined at the hip,\u201d he said. \u201cYou can\u2019t plan one without the other.\u201d<\/p>\n

For Clayton, the best approach to timing your Social Security benefits is one that meets your individual retirement goals and tax strategy<\/a>. Though each client is unique, he has developed a baseline approach that realistically models the value of Social Security.<\/p>\n

To create this model, he looks at the following factors:<\/p>\n

IRMAA tiers and projected premium inflation<\/p>\n

Required minimum distribution (RMD) timing and tax-rate drift<\/p>\n

Longevity probabilities based on medical history<\/p>\n

Personal preference \u2014 whether a client wants guaranteed income now versus later<\/p>\n

\u201cThe \u2018optimal\u00a0age\u2019 is rarely 70 or 62;\u00a0it\u2019s\u00a0the point where lifetime spendable income is highest after taxes and healthcare costs,\u201d he said. \u201cI call that the behavioral break-even \u2014 where math and mindset meet.\u201d<\/p>\n

To create a balanced retirement plan, your best bet is to sit down with a qualified financial advisor. Together, you can\u00a0determine\u00a0the best time to collect your Social Security benefits \u2014 and\u00a0don\u2019t\u00a0automatically assume that age 70 is your best option.<\/p>\n

This article is part of GOBankingRates\u2019 Top 100 Money Experts series, where we spotlight expert answers to the biggest financial questions Americans are asking. Have a question of your own? Share it on our hub<\/a> \u2014 and you\u2019ll be entered for a chance to win $500.<\/p>\n

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This article originally appeared on GOBankingRates.com<\/a>: I\u2019m a Retirement Planner: Here\u2019s Why Delaying Social Security Until 70 Could Cost You Money<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"If\u00a0you\u2019re\u00a0even casually thinking about your retirement plans, you\u2019ve probably been bombarded with a common piece of advice: Wait…\n","protected":false},"author":2,"featured_media":287954,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,86097,147,530,733],"class_list":{"0":"post-287953","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-clayton","10":"tag-personal-finance","11":"tag-personalfinance","12":"tag-social-security"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/287953","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=287953"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/287953\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/287954"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=287953"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=287953"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=287953"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}