If you want to figure out the best time to start collecting Social Security benefits, it’s simple. Simply climb into your Delorean, travel 30 years into the future, go watch yourself without disrupting the space-time continuum, then come back and report your findings.

The point is to optimize Social Security without full knowledge of your lifespan, your spending, and the performance of your personal retirement savings portfolio. But your best bet is to delay collecting Social Security benefits for as long as you can afford to do so.

The advantage of delaying Social Security payments

Retirees become eligible for Social Security benefits as early as age 62, but collecting this early means you’ll receive a smaller monthly payment in return. For each month preceding the age of full retirement, your monthly payment is permanently reduced by 5/9 of 1% up to 36 months and by 5/12 of 1% for each additional month.

On the other hand, deferring Social Security benefits beyond full retirement age increases your payment by 8% per year, but retirees will not receive any additional credit beyond age 70. That’s an exceptional guaranteed return just to wait a few years.

A person born in 1960 will be 62 next year. Even if their full retirement age is 67, they could start collecting Social Security payments, but they would only receive 70% of their full retirement age benefit. If they wait until they are 70, they will receive 124% of their full retirement pension. That person only has to live to age 81 for the deferred Social Security benefit to be better than taking it early. If they live to age 85, that will be the best possible choice among all the options.

The simple reason why you should delay if you can

You cannot know how long you are going to live. If you are over 85, you win the bet of postponing Social Security until age 70; if you die sooner, it turns out you made a suboptimal decision.

But it is an unbalanced bet. The downside of getting it wrong by delaying Social Security isn’t that big of a deal, but the downside of getting it wrong by taking it early can be tragic.

If you have enough retirement savings to live comfortably in your 60s, you don’t really need that extra Social Security money. You can live the retirement you want, and if it ends sooner than expected, you still have to live it your way.

But if you live well beyond 85 in your 90s, it’s much more likely that you really need that maximum Social Security payment. Most retirement plans are based on a 30-year retirement. Your savings may not last for up to 90 years. Also, you may need more medical care or home assistance at this age which is extremely expensive.

A larger Social Security check each month will go a long way towards covering the expenses of a long retirement. It helps to alleviate the financial burden so that it does not fall on your children. Or it just means that there is more to leave to your heirs when you pass away.

Delaying social security benefits is just protection against a long life. Considering that you can only live to regret taking Social Security too early, this is great coverage to take if you can afford it.