Most commentators advise waiting until age 70 to start drawing Social Security retirement benefits because if you wait, you draw more. Everyone already knows that if you wait until full retirement age, currently 66, you draw 25% more than if you start retirement benefits at age 62, but if you delay starting on benefits until age 70 you receive even more benefits. There's no point waiting until after age 70 because benefits don't go up after that.
Here's a chart showing the "breakeven analysis" used to display the argument that it's best to wait until age 70 if you can:
The Motley Fool argues that the advice to wait until age 70 is bunk. They say that the standard breakeven analysis is flawed because it doesn't factor in the time value of money, that is, interest. If you start drawing $1,000 a month at age 66 and put it in the bank until age 70, you don't just end up with $1,000 times 48 months, $48,000, you end up with a larger amount due to the interest you will have earned. Here's the Motley Fool's breakeven analysis, assuming a 5% interest rate:
A 5% interest rate may be a bit more than you're likely to get under current conditions but you get the idea. Delaying starting benefits may not be all it's cracked up to be. Maybe Social Security isn't giving a big enough delayed retirement credit to make it worth foregoing the income now.