Many financial experts — including those within AARP — believe that if you can afford it, you should wait until age 70 to begin receiving Social Security benefits. The argument is simple: With each year you wait after reaching your full retirement age, your monthly check will be 8 percent larger, an annual rate of return that’s hard to beat. Given that people are living longer, the argument goes, chances are good that the delay will optimize your benefits across your lifetime.
But other experts — also including those within AARP — note that there are cases in which signing up earlier is wiser; it’s not always a clear-cut issue. To explore the question more fully, AARP asked two outside financial advisers to argue the case.
The expert: Kurt Czarnowski, is a retirement planning consultant and a former Social Security Administration regional communications director.
If you need Social Security checks to pay rent, buy food or cover health care costs, then the decision is obvious: Start taking benefits when necessary.
But for those with some financial wiggle room? There are no guarantees in life, and the sooner you start drawing a monthly benefit, the sooner you can start using it however you want, Czarnowski says. And you may enjoy the money more when you are younger.
Trying to predict your life span isn’t always a good bet, either. “Your family can have remarkable longevity on both sides, and you can still have an accident tomorrow,” Czarnowski says. It makes even more sense to take your benefit at full retirement age or earlier if you have health problems that might shorten your longevity.
As to the math: The plus of starting benefits at age 66 or 67 is that your money accrues over a longer period. It won’t be until you’re 82 years and 6 months old that you will get fewer dollars overall from Social Security than if you waited until age 70.