'Should I Take Social Security at 67 or 70?’ Here’s Suze Orman’s Frank Advice

When you reach retirement age, it’s time to start making some decisions about Social Security benefits.

While you can take benefits as soon as you hit retirement age, or even earlier, you also have the option to wait. The timing of when you take Social Security benefits impacts your monthly check amount.

Financial expert Suze Orman weighed in on a listener’s situation during a recent episode of the Women & Money podcast. We explore her frank advice and how it might help you in your own retirement planning.

Vic wrote into the show with a question about when to take his Social Security benefits. At age 67, Vic is still working, but does not have pressing financial needs. He is entirely debt-free, with both his home and car paid off.

Vic says that if he claims his Social Security benefits now, he would receive $3,500 per month. If he waits until age 70, he’ll receive $4,500 per month instead. His grandson advises taking the benefits now. But Vic wants Orman’s opinion.

Essentially, Orman suggests waiting to claim benefits until age 70. After all, Vic doesn’t seem to need the funds right now, and waiting comes with a larger monthly check.

“Vic should wait and defer,” Orman says. “Wait until you’re 70. Get the $4,500.”

Read on for more details on why Orman thinks waiting is the right decision.

If Vic waits to collect his Social Security benefits, his monthly check will increase. The Social Security Administration notes that for each year you delay taking benefits after full retirement age, your monthly check grows by 8%.

The guaranteed option to increase his benefit amount is worthwhile, Orman says.

“Where else are you going to earn 8% a year guaranteed on your money for the next three years?” Orman asks.

In addition to the boosted returns, yearly cost-of-living adjustments may push his benefits even higher, she notes.

Since a high, guaranteed return on your money is almost impossible to find, waiting to collect Social Security benefits is one surefire way Vic can boost his monthly income in retirement.

If Vic can wait to collect his benefits, it’s likely the best long-term option for his finances. After all, this is one of the best-guaranteed returns you can get anywhere.

Beyond the guaranteed boost to his retirement income, Orman notes that Vic could face tax consequences for taking his Social Security benefits while continuing to work.

“You also have to remember that depending on how much money you are already making and your other income and all of that, this $3,500…could be taxable,” Orman says.

If Vic plans to continue working while taking his Social Security benefits, more of his benefits check could be considered taxable income. Since no one wants to overpay on taxes, waiting to claim Social Security benefits can help reduce Vic’s tax obligations.

Beyond the ability to lock in a guaranteed return and potentially lower his tax burden, Orman points out that many factors in Vic’s situation point to the wisdom of waiting to claim.

Specifically, Vic is in a solid financial position with no debt. He’s still working and doesn’t need the monthly cash flow right now.

Additionally, Orman points out that she doesn’t know about his spouse’s financial situation.

“Now Vic, I don't know if you have a spouse, whatever, but if your spouse is younger than you and not making a whole lot of Social Security, wouldn't you wanna leave them $4,500?” Orman asks.

If Vic has a younger spouse who might rely on survivor benefits, then waiting to take Social Security also protects the spouse’s financial future. After all, a higher monthly benefit check also provides larger survivor benefits.

Orman was particularly interested in the fact that Vic’s grandson advised him to take the Social Security benefits now instead of waiting. She seemed convinced that the grandson wanted some extra funds from his grandfather.

Whether or not that’s true, Orman pointed out that delaying taking Social Security benefits seems to make the most sense for Vic’s situation.

You can learn a lot from Vic’s situation — and Orman’s advice. Delaying your Social Security benefits can push your monthly benefit amount higher.

As you prepare for your own retirement, take the time to map out how you plan to stretch your retirement dollars further. A little bit of planning can go a long way.