Waiting Until 70 for Social Security: How Long Must You Live to Make it Worth the Wait?

By Larry Kotlikoff

April 29, 2013

If you outlive your life expectancy, economist Larry Kotlikoff says you will want the highest possible Social Security check. If you don't, you won't need one.

Joe Ruthenberg -- Vista, Calif.: How many years will it take me to recover passed over benefits if I wait until age 70? At age 66, I will receive $1,512. At age 70, $2,119 per month.

Larry Kotlikoff: You seem to be thinking something like, "Gee, if it takes me 15 years to break even after waiting until 70 to start collecting and my life expectancy is only 82, it doesn't make sense to wait." This is not the right way to think about waiting to collect. The reason is that you won't die precisely at 82 or whatever your life expectancy happens to be.

Look at the actuarial tables used by Social Security (though they figure to underestimate longevity, since they date from 2007 and life expectancy has grown since).

Here are the 2007 projections for the ages at which you might make a Social Security decision, 62 to 69. The first column is age; the second, the odds of your dying in the next year at that age, if you're a man. The third column lists the number of years of life expectancy left, on average (again, for men). The next two columns provide the same data for women.

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http://www.pbs.org/newshour/businessdesk/2013/04/waiting-til-70-for-social-secu.html