Why Delaying Social Security Benefits May Not Always Be the Best Strategy

For years, conventional wisdom has encouraged Americans to delay claiming Social Security benefits until age 70. The logic is straightforward: since Social Security provides guaranteed, inflation-adjusted income, waiting maximizes monthly payments and offers protection against outliving one’s savings.

While sound in theory, this approach isn’t right for everyone. In practice, most retirees claim benefits well before age 70—and often for good reason.

The Hidden Tradeoffs of Waiting

Delaying Social Security helps reduce longevity risk, but it also comes with overlooked tradeoffs. Many financial analyses assume very low investment returns when comparing the value of claiming now versus later. However, many retirees hold diversified portfolios that historically have earned higher than average yields in the long term. Under these more realistic assumptions, the advantage of waiting diminishes. In some cases, claiming earlier and prudently investing those funds can yield comparable or even better lifetime outcomes.

Mortality and Market Risks

Delaying benefits also introduces other forms of risk. Passing away earlier than expected could result in leaving substantial unclaimed benefits behind—especially for single retirees. Additionally, delaying can increase market sequence risk, or the danger of drawing down investment accounts to cover expenses during a market downturn, while waiting to start collecting Social Security. These early withdrawals can reduce portfolio longevity and future flexibility.

Flexibility and Control

Waiting to claim often means spending more from personal savings in the early years of retirement, leaving less available for unexpected needs or opportunities. Once benefits begin, Social Security provides steady income but limited flexibility. Claiming earlier allows retirees to preserve more control over their assets—whether to help family, travel, or pursue meaningful experiences while health and energy are strong. Of course, there are also concerns about Social Security running out of funds in the not so distant future, so retirees may want to claim as early as possible to maximize their payments while funds are still available.

The Behavioral Side of Retirement Income

Financial decisions are not made in spreadsheets alone. Retirees tend to spend more confidently from guaranteed income sources like Social Security than from investment accounts. For many, claiming earlier can promote peace of mind and balanced spending—allowing them to enjoy retirement, not just sustain it.

Finding the Right Balance

The optimal claiming strategy depends on individual health, longevity expectations, marital status, and lifestyle goals. For some, delaying benefits may provide valuable longevity protection. For others, claiming earlier offers greater flexibility, reduced risk, and a higher quality of life.

At LMC, we help clients evaluate this decision holistically—balancing data with personal priorities. The right strategy isn’t simply about maximizing benefits; it’s about ensuring lasting financial independence, flexibility, and fulfillment throughout retirement. Please reach out to your LMC professional should you have any questions regarding when to start claiming your Social Security benefits.