Experts generally recommend that retirees wait until age 70 to start drawing Social Security. But it seems most workers don't want to wait that long to access some of cash from a program they've been paying into for many years.

According to the Schroders 2023 U.S. Retirement Survey, of 2,000 investors questioned only 10% of non-retired workers plan to hold off until they're 70 to collect Social Security, despite the impact to the amount they would receive. Nearly three in four (72%) non-retired workers reported knowing that they could receive higher payments by delaying the start date.

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Regardless, the decision for many workers isn't driven by professional advice or long-term planning. Almost half (49%) of all retirees told Schroders they have no strategy for how they will use their retirement income.

Instead of going with your gut — or following the herd — consider these reasons to wait until 70.

Why do workers collect benefits before 70?

In the survey, workers cited these top reasons for not waiting until age 70 to apply for Social Security:

• 44% fear that Social Security may run out of money

• 36% need the money

• 34% say it's their money and they want access as soon as possible

• 13% say they were advised to take it before age 70

Unfortunately, workers appear misinformed about the fundamentals of Social Security.

"We have a crisis of confidence in the Social Security system and it’s costing American workers real money," Deb Boyden, head of U.S. defined contribution for Schroders, said in a news release.

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Five reasons to delay Social Security benefits

Not everyone can afford to wait until age 70 to claim Social Security but an estimated 90% or more of workers would benefit from waiting until that age, according to a 2022 paper co-authored by Boston University economics professor Laurence Kotlikoff. Here are five top reasons:

1. Increase your benefit

Your Social Security benefit increases by up to 8% each year you postpone collection beyond full retirement age — which is 66 or 67 depending on when you were born. By delaying to age 70, you become eligible for the maximum benefit: up to 132% of your full retirement benefit.

But that doesn't necessarily mean you have to work until age 70. You could use your retirement savings to supplement your cash flow in your late-sixties and then apply for Social Security once you're eligible for the maximum benefit.

Workers can choose to retire and receive Social Security as early as age 62, but risk losing up to 30% of the benefit amount by collecting early.

2. Maximize COLA

The Social Security Administration's annual cost-of-living adjustment (COLA) isn't a set dollar amount but a percentage of your benefit. So by waiting until age 70, not only do you increase your monthly Social Security benefit but you also increase the compound potential of each COLA increase.

3. Reduce your tax bill

If you earn income while collecting Social Security, you might subject up to 85% of your benefit to taxes if your "combined income" surpasses a certain threshold. So waiting to draw until a later age when you've decreased your income or you've stopped working altogether can help lower your taxes.

4. Compensate for under-saving

The majority of workers (59%) aged 45 and older told Schroders they expect to have less than half of the money ($500,000) they believe is needed to retire comfortably. While there's no magic dollar amount you need to retire — Americans believe they need $1.27 million, according to a study by Northwestern Mutual — maxing out your Social Security is one way to make up for a shortfall in retirement savings.

5. Life expectancy

Many prepare for their early years of retirement, but struggle to plan for the later years. When you delay the start of Social Security, you ensure you'll qualify for a higher amount in your later years, when you're likely less able to earn income.

Others fear that delaying until age 70 will amount to a sacrifice made in vain because of a shorter-than-expected lifespan. But keep in mind that your spouse or dependents may receive survivor benefits after you pass.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.