Why Delaying Social Security Isn't Always the Best Decision

Why the "always wait until 70" rule oversimplifies a decision that depends on health, household structure, taxes, and the rest of the balance sheet

May 2, 2026

There is no piece of conventional retirement advice that is repeated more often --- or more confidently --- than "wait until age 70 to claim Social Security." It has become the default answer in personal-finance columns, in podcasts, in software tools, and in client meetings across the industry. The math behind it is real. A worker with a full retirement age of 67 who delays to 70 increases the monthly benefit by 24 percent above the FRA amount, and the gap between the age-62 benefit and the age-70 benefit is roughly 77 percent. ¹ ² Compounded over a long retirement, that is a meaningful difference.

The problem is that a default answer is not the same as a correct answer. The 8-percent-per-year delayed retirement credit was designed to be roughly actuarially neutral --- the system expected you to receive about the same total dollars whether you claimed at 62, 67, or 70, on average. ³ "On average" is doing a lot of work in that sentence. Half of households are not average. Delaying is the right call for some clients. For others, claiming at FRA --- or even at 62 --- produces the better lifetime outcome.

This piece walks through the situations where the delay-to-70 default falls down. It is not an argument against delaying. It is an argument that the claiming decision deserves the same multi-year, household-specific analysis we apply to a Roth conversion or a business sale --- not a slogan.

Social Security retirement benefits are calculated from a worker's primary insurance amount, or PIA. The PIA is the monthly benefit a worker would receive if they claimed at full retirement age. For everyone born in 1960 or later, FRA is 67. ⁴ A worker can claim as early as 62 or as late as 70, with adjustments in both directions.

The reduction for early claiming is set by formula. For each of the 36 months immediately preceding FRA, the benefit is reduced by 5/9 of one percent --- about 6.67 percent per year. Beyond 36 months, the reduction continues at 5/12 of one percent per month, or 5 percent per year. ⁴ For a worker with FRA of 67 who claims at 62, the cumulative reduction is exactly 30 percent. The increase for delaying past FRA is the delayed retirement credit, set at 8 percent per year (16/24 of one percent per month) for everyone born in 1943 or later. ¹ Delaying from FRA-67 to age 70 produces a 24 percent increase. The DRC stops accruing at 70, even if a worker waits longer.

For context, the 8 percent annual delayed credit is not an arbitrary number. It was phased in by the 1983 Social Security Amendments, with the increase to 8 percent per year beginning in 1990 and the full credit applying to workers born in 1943 or later. ⁵ Before the 1983 phase-in, the credit was much smaller. The "delay always wins" advice is, in part, a reaction to a credit that finally got large enough to be worth the wait. It is also a reaction to longevity gains since the original adjustment factors were set decades ago. The Congressional Research Service has noted that the actuarial adjustments are "decades old and do not reflect improvements in longevity or other important developments over that time," which means delaying can be a better-than-neutral bet for someone with average or above-average life expectancy. ³

Figure 1 shows the benefit as a percentage of PIA for a worker with FRA of 67 across each claiming age from 62 to 70. The slope is gentler from 62 to FRA and steeper after FRA --- which is part of why the "delay all the way to 70" answer became conventional. Figure 2 shows what that translates to in real 2026 dollars at the maximum-earner level: the maximum benefit is $2,969 per month at age 62 and $5,181 per month at age 70 --- a $2,212 monthly difference for the same career earnings record. ⁶

Figure 1: Social Security benefit as a percentage of PIA, by claiming age, for a worker with full retirement age 67. Reduction is 5/9 of 1 percent per month for the first 36 months pre-FRA and 5/12 of 1 percent per month thereafter; the delayed retirement credit is 8 percent per year, capped at age 70.

Figure 2: 2026 maximum-earner monthly Social Security benefit by claiming age. Anchored to the SSA-reported age-70 maximum benefit of $5,181 per month and applied through the standard reduction and delayed-retirement-credit factors.

Health and longevity below the average

The actuarial neutrality of the delay credit is built on average mortality. For someone whose health, family history, or occupation places them well below average longevity, the math flips. A worker who claims at 62 and dies at 73 will have collected 11 years of reduced benefits. The same worker who delayed to 70 would have collected only 3 years, at a higher monthly amount that doesn't begin to make up the gap until well into their 80s. The break-even age between claiming at 62 and claiming at 70 sits in the early 80s for most assumption sets --- meaning the delay is the right call only if the client outlives that crossover.

This is the first question I raise when a client is weighing claiming. Family history matters. Smoking history matters. Cardiovascular and cancer history matter. So does the simple fact that population-level life-expectancy gains have not been evenly distributed --- longevity improvements over the past four decades have accrued disproportionately to higher-income households, which is part of why the delay-to-70 prescription works better in client meetings than it does in the actual population. ³

The lower-earner spouse in a two-Social-Security household

This is the situation where the conventional advice gets most consistently wrong. When both spouses have meaningful work records of their own, the household has two PIAs to manage --- not one. The right framework is usually that the higher earner's claim deserves the most delay, because that benefit becomes the survivor benefit when the first spouse dies. The Social Security survivor benefit pays up to 100 percent of the deceased spouse's benefit at the survivor's full retirement age. ⁷ Delaying the higher-earner's claim raises both monthly checks during joint life and the survivor check after the first death. That is real money.

The lower-earner's claim is a different decision. Once the higher-earner has filed --- or in some claiming sequences before that --- the lower earner can collect their own benefit while the household waits on the higher-earner's. The lifetime-benefit math for the lower earner often supports claiming earlier than 70 (sometimes at FRA, sometimes earlier still), because the lower earner's benefit will not become the household's permanent income when the first spouse dies. The survivor steps up to whichever benefit is larger, which is almost always the higher earner's. ⁷ Claiming the lower benefit early monetizes years that would otherwise be left on the table.

A household that applies "delay to 70" symmetrically to both spouses is often leaving money behind. The asymmetric strategy --- delay the higher earner, claim the lower earner earlier --- is closer to optimal in most two-earner households we see.

Cash flow needs in the bridge years

Some retirees genuinely need the income at 62 or 65. A delay strategy works only if the client has another source of cash --- portfolio withdrawals, deferred compensation, a pension --- to cover the gap years. For a household without that bridge, "delay" is not a free option. It is a forced sequence of larger portfolio withdrawals at the very beginning of retirement, exactly when sequence-of-returns risk is most severe.

If the alternative to claiming Social Security at 62 is liquidating $40,000 a year of equities through a market drawdown, the delay can compound the wrong way. The Social Security benefit foregone is a sure thing; the portfolio damage from selling into weakness is a real, irreversible loss. For a household without a deep bond ladder, money-market reserve, or other guaranteed-income bridge, claiming earlier is sometimes the right defensive move --- especially if the alternative is locking in losses at the start of a 30-year drawdown plan.

The earnings test bites less than people think --- and the suspended months come back

The earnings test is the most-feared and least-understood feature of early claiming. For 2026, a beneficiary who is under FRA all year and is also working has $1 of benefits withheld for every $2 of earnings above $24,480. ⁸ In the calendar year a worker reaches FRA, the threshold rises to $65,160 with a $1-for-$3 withholding rate, and the test stops applying altogether the month FRA is reached. ⁸ Once a worker is past FRA, the earnings test does not apply at all.

The piece that gets missed: the dollars withheld under the earnings test are not lost. When the worker reaches FRA, the Social Security Administration recomputes the benefit upward to account for the months of benefits that were withheld --- effectively converting them into a higher monthly benefit for the rest of the worker's life. ⁹ Workers who claim at 62 while still earning don't permanently sacrifice the withheld dollars; they exchange them for a higher post-FRA benefit, in a way that is closer to a delayed claim than to a forfeit. Knowing that changes the calculus for clients still earning at 62 or 63.

Trust-fund risk is not nothing

This one is awkward to discuss, and we try not to overstate it. But the 2025 Social Security Trustees Report projects that the Old-Age and Survivors Insurance Trust Fund's reserves will be depleted in 2033, after which scheduled program income would cover only 77 percent of total scheduled benefits. The combined OASDI funds reach depletion in 2034 with 81 percent payable. ¹⁰ ¹¹ The Social Security Fairness Act, enacted on January 5, 2025 --- which repealed the Windfall Elimination Provision and Government Pension Offset --- accelerated the combined depletion date by one year relative to the prior projection. ¹¹

Congress has multiple times in the past stepped in well ahead of trust-fund exhaustion --- the 1977 and 1983 Amendments are the canonical examples, and the system survived both with benefits intact. We are not predicting a 23 percent benefit cut. We are saying the cut is the law on the books absent congressional action, and the political path forward is uncertain. For some clients, that uncertainty changes how they weigh "a sure check today versus a larger possible check in eight years." It is not a reason to claim early on its own, but it is one input among several.

Tax interaction during the delay window

Up to 85 percent of Social Security benefits are includible in income for tax purposes once "combined income" --- adjusted gross income, plus tax-exempt interest, plus half the benefits --- crosses $34,000 single or $44,000 joint. ¹² Below $25,000 single / $32,000 joint, none of the benefit is taxable. Between those thresholds, up to 50 percent is taxable. Those numbers are not indexed to inflation and have not moved in decades. ¹²

Why this matters for the claiming decision: the years between retirement and the start of Social Security are usually the lowest taxable-income years in a client's life. Those are the most valuable years for Roth conversions, for capital-gains harvesting at the 0 percent long-term rate, and for filling up lower brackets cheaply. Once Social Security starts, additional ordinary income gets taxed at the marginal bracket plus the tax-torpedo effect of dragging another 50 or 85 cents of benefits into the taxable base. A retiree who claims Social Security at 62 has narrowed --- or eliminated --- the conversion window. A retiree who delays to 70 has eight years of low-income runway to do conversions cheaply. Figure 3 illustrates the difference for a sample household.

This is where the "delay to 70" answer is most often correct, not least. If the household has a large pre-tax IRA, no other major income source between 62 and 70, and a goal of converting some of it to Roth at favorable brackets, delaying Social Security is rarely the wrong call. The argument cuts both ways: delay can be wrong when health, cash-flow, or a lower-earner spouse weight against it, and delay can be very right when conversion runway is the binding constraint.

Figure 3: Cumulative lifetime Social Security benefits received by claiming age, for an illustrative worker with a $3,000 PIA and FRA 67. No COLA, no taxation, no investment of received benefits --- the chart isolates the actuarial trade-off only. Break-even ages are sensitive to assumptions and should be customized to the household.

We do not believe in defaults for this question. Every household goes through the same multi-step framework before we recommend an age:

We start with health and family longevity. If both clients are in average-or-better health and have parents and grandparents who lived into their late 80s or 90s, the longevity assumption supporting delay is reasonable. If not, the case for delay weakens.

We map both spouses' PIAs separately, not as a household total. The higher earner's claiming age is usually the more important decision, because it sets the survivor benefit. The lower earner's optimal claiming age is often quite different.

We model the bridge. We look at the actual portfolio composition, the cash reserve, any pension or deferred-comp income, and the client's spending plan. If the client cannot bridge to 70 without forcing equity sales into a drawdown, the delay strategy is borrowing portfolio risk to pay for an actuarial gain. That trade is sometimes worth it. Sometimes it isn't.

We model the tax window. If there is a meaningful pre-tax balance and a real conversion runway, delay is usually right --- not because of the actuarial credit alone, but because the bracket arbitrage on Roth conversions during the delay window often produces more lifetime value than the delay credit itself.

We weigh the irreversibility honestly. Once the client claims, the options for undoing the decision are limited --- a one-time withdrawal of application is permitted only within a narrow window after the original filing and requires repayment of every benefit dollar received. That asymmetry is part of why we treat the claiming election with the same care we apply to a Roth-conversion sequence or the structuring of a business sale.

The takeaway is that this is a planning decision, not a personal-finance heuristic. For the household where delay is right, we want the client to delay with confidence and a clear bridge plan. For the household where it isn't, we want the client to claim earlier without feeling like they're breaking a rule. Both groups exist. The advisor's job is to know which one the client is in.

If you are in or approaching the claiming window, the right answer is almost certainly not the one you read in a column. It is the one that comes out of running the numbers for your longevity, your household earnings record, your portfolio bridge, and your tax window. We are happy to do that analysis with you, with your CPA, and with any of the other professionals involved in your plan. This piece is educational. The decision is a conversation.

Our team will continue monitoring the Trustees Report releases each year, the OBBBA-era tax landscape, and any legislative response to the 2033 / 2034 depletion timeline. We will update clients if anything shifts that should change the framework above.

Delaying Social Security is the right answer for a lot of clients. It is not the right answer for all of them. The default has become so dominant that the cases against it are no longer being seriously stress-tested in most planning conversations. Our job is to stress-test them anyway.

The claiming decision rewards rigor. Health, household structure, the bridge years, the tax window, and the surviving-spouse calculus all matter. None of them get answered by a slogan. We approach the decision the same way we approach every other long-horizon plan question --- multi-year, household-specific, tax-aware, and documented.

All my best,

Brandon VanLandingham, CFA, CMT, CFP

Founder / CIO

1. SSA, "Delayed Retirement Credits," https://www.ssa.gov/benefits/retirement/planner/delayret.html.

2. SSA, "What is the maximum Social Security retirement benefit payable?" https://www.ssa.gov/faqs/en/questions/KA-01897.html (2026 maximum benefits at age 62 and 70).

3. Congressional Research Service, "Social Security: Adjustment Factors for Early or Delayed Benefit Claiming," R47151, https://crsreports.congress.gov/product/pdf/R/R47151.

4. SSA, "Retirement Age and Benefit Reduction," https://www.ssa.gov/benefits/retirement/planner/agereduction.html.

5. SSA, "Effect of Early or Delayed Retirement on Retirement Benefits," https://www.ssa.gov/oact/ProgData/ar_drc.html.

6. SSA, "Maximum-taxable benefit examples," https://www.ssa.gov/oact/cola/examplemax.html.

7. SSA, "Survivors Benefits," Publication 05-10084, https://www.ssa.gov/pubs/EN-05-10084.pdf; SSA, "Benefits for Spouses," https://www.ssa.gov/oact/quickcalc/spouse.html.

8. SSA, "Exempt Amounts Under the Earnings Test," https://www.ssa.gov/oact/cola/rtea.html; SSA, "How Work Affects Your Benefits (2026)," Publication EN-05-10069, https://www.ssa.gov/pubs/EN-05-10069.pdf.

9. SSA, "Receiving Benefits While Working," https://www.ssa.gov/benefits/retirement/planner/whileworking.html.

10. SSA, "The 2025 OASDI Trustees Report," https://www.ssa.gov/oact/TR/2025/X1_trLOT.html.

11. SSA News Release, "Social Security Board of Trustees: Projection for Combined Trust Funds One Year Sooner than Last Year," June 18, 2025, https://www.ssa.gov/news/en/press/releases/2025-06-18.html.

12. IRS, "IRS reminds taxpayers their Social Security benefits may be taxable," https://www.irs.gov/newsroom/irs-reminds-taxpayers-their-social-security-benefits-may-be-taxable; IRS Publication 915 (2025), https://www.irs.gov/publications/p915.

This piece is educational. It is not legal, tax, or accounting advice and is not a recommendation to take or refrain from any specific action. Social Security and tax law are fact-specific and change regularly. Please coordinate any decisions discussed here with your attorney, your CPA, and Perissos before acting.

Perissos Private Wealth Management is a Registered Investment Adviser ("RIA"). Registration as an investment adviser does not imply a certain level of skill or training, and the content of this communication has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. Perissos Private Wealth Management renders individualized investment advice to persons in a particular state only after complying with the state's regulatory requirements, or pursuant to an applicable state exemption or exclusion. All investments carry risk, and no investment strategy can guarantee a profit or protect from loss of capital. Past performance is not indicative of future results.

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