For years, many financial advisors have repeated the same recommendation: waiting until age 70 to claim Social Security benefits guarantees the highest possible monthly payment. However, some experts warn that this strategy, while seemingly sound on paper, can be costly and risky in practice, especially if the retiree's health or financial situation is not favorable. Financial planner D'Andre Clayton, co-founder of Clayton Financial Solutions, argues that waiting can become more of a gamble than a guarantee. In an interview with GOBankingRates, I explained that the decision depends on factors such as longevity, health, and household finances once retirement begins. "The most likely consequence is not living long enough to reach the break-even point. For example, if you wait until 70 instead of 65, your break-even point would be around 81 or 82," Clayton calculated. “The problem with this is that the average life expectancy for men is 75.8 years and for women 81.1.”

That difference makes it clear that many retirees, especially men, may not live long enough to enjoy the increase that waiting provides. Clayton says he has worked with clients who postponed their benefits and died before receiving what they would have received had they started collecting earlier. In other cases, beneficiaries reached age 70 with health problems or financial limitations that prevented them from fully taking advantage of the higher payments.

Furthermore, delaying collection can also have tax and estate planning consequences. Clayton warns that the surviving spouse may miss out on a Social Security check and, at the same time, be affected by adjustments to IRMAA (the income-based Medicare surcharge), which reduces the net benefit.

Another point that many overlook is the opportunity cost of waiting. If a person decides to postpone their payments from age 62 to 70, they stop receiving money for eight years. Those funds could be invested and generate potentially higher returns than the increase offered by Social Security. "Between ages 62 and 70, those deferred payments could have been invested in Roth accounts, stocks,or even Bitcoin—anything that could yield more than the deferred benefit," the expert noted. Clayton also raises an aspect that few consider: the uncertainty surrounding the future of the Social Security program itself. While he doesn't believe the system will disappear, he warns that adjustments could be made to keep it solvent, such as modifying deferred retirement credits or the benefit amount. "We have to be realistic. The Social Security disability trust fund has a projected point of depletion," Clayton noted. "I don't think that means the end of the program, but it's possible that the expected increase will be adjusted to keep it solvent." The lesson, according to the experts, is that there is no one-size-fits-all formula for all retirees. Delaying payments can be advantageous for those in good health and financially stable, but it can be detrimental for those facing medical or financial uncertainty. Before deciding, experts recommend carefully considering personal circumstances, life expectancy, and financial goals. Making the right decision not only affects the size of your monthly paycheck but also your financial security in retirement.

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