Delaying Social Security to 70 Costs About $158,000 in Skipped Checks, and Still Beats Any Annuity You Can Buy.

Delaying Social Security from 62 to 70 costs roughly $158,000 in skipped checks but delivers a benefit about 76% higher in nominal terms.

Inflation-adjusted private annuities pay only around 5% of premium annually, making delayed Social Security's lifetime COLA benefit commercially unbeatable at current interest rates.

The delay strategy's break-even falls in the early 80s, and Social Security's projected 2033 trust fund exhaustion could trigger benefit cuts without legislative action.

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Claiming Social Security at 62 delivers a smaller check for the rest of a retiree's life. Waiting until 70 delivers a much larger one, but only after eight years of collecting nothing.

The choice sits inside every retirement plan, and the headline number, roughly $158,000 in skipped checks between 62 and 70, is the price of admission for the larger benefit that follows. The question is whether that trade is worth taking when the alternative is buying guaranteed income on the open market.

The Social Security Administration's rules are straightforward. Claiming at 62 reduces the full retirement age benefit by up to 30%. Waiting past full retirement age adds roughly 8% per year in delayed retirement credits, capped at age 70. The gap between claiming at 62 and at 70 amounts to a benefit that is about 76% higher in nominal terms, before any cost-of-living adjustments are applied.

Take a worker with an average earnings history, and the early benefit at 62 runs in the neighborhood of $1,650 per month. Skipping eight years of those checks is where that roughly $158,000 figure comes from.