Data Suggests Age 70 as Optimal for Social Security Claims

A significant gap exists between the optimal timing for Social Security claims and actual claimant behavior, according to research from the National Bureau of Economic Research (NBER). While individual health and financial circumstances vary, data suggests that delaying benefits until age 70 provides the highest lifetime payout for most individuals. A 2022 NBER paper found that over 90% of Americans would maximize their benefits by waiting until age 70. However, only 10.2% of claimants actually do so. The strategy relies on the 'break-even' point, where the higher monthly payments received after age 70 eventually surpass the total cumulative payments received by those who claimed earlier. Actuarial data from the Social Security Administration supports this delay. At age 70, the average life expectancy is 84.09 years for men and 86.27 years for women, both of which typically exceed the break-even age. By claiming earlier and living past this point, individuals effectively leave potential lifetime income on the table. Despite the mathematical advantage, the decision remains highly personal. Factors such as immediate liquidity needs, retirement savings shortfalls, or chronic health issues often drive claimants to take benefits earlier, overriding the long-term optimization strategy.