I focus on dividend strategies in retirement. A good stream of dividends can make the difference between living well in retirement and moving in with your kids.

But overlooking Social Security is a mistake. It’s the single most important source of income for most retirees.

Around one quarter of all retirees depend on the benefits for 90% or more of their income. A little over half of retirees depend on it for at least 50% of their retirement income.

And the age at which you claim Social Security can affect your monthly checks by a substantial amount.

So let’s talk about when you should start taking Social Security benefits.

When to Claim Social Security Benefits

You can start Social Security as early as 62. But the longer you wait, the larger your monthly checks will be.

Here’s how the maximum benefits shake out for anyone starting Social Security in 2020:

  • $3,790 per month for a person filing at age 70.
  • $3,011 for someone filing at “full” retirement age of 67.
  • $2,265 for someone filing early at age 62.

That’s a $1,525, or 67%, difference per month between taking benefits at 62 versus waiting to 70.

Those numbers make it seem like 70 is the no-brainer option for anyone.

But when it comes to Social Security, you’ll have to ask yourself some uncomfortable questions. Be honest with yourself about how long you expect to live.

If you’re in good health, and your family has a history of living to a ripe old age, you should do everything you can to wait until age 70.

But delaying until 70 only makes sense if you expect to live longer. Starting Social Security at 70 means you need to live beyond 82 to receive more than someone who claimed between 62 and 67.

So take the money earlier if you don’t think you’ll live that long.

Why Delaying Benefits Is an Option

Social Security retirement stop Social Security claim Social SecurityOur government doesn’t always make the best decisions. But Social Security age cutoffs are no accident. The current life expectancy for the average American is 78.7 years. The number for some demographics is even lower than that.

The government knows that. And with a large enough sample size, it “makes money” by incentivizing retirees to postpone their benefits to age 70.

If the average American croaks 3.3 years before the breakeven age, that’s more than three years of benefits they don’t have to pay.

So, be honest with yourself. If your parents or grandparents survived well into their 80s or 90s, you have a better chance of passing the 82-year-old breakeven point. If your family tends to die younger, your odds aren’t as good.

It’s always something of a gamble. Any of us can get hit by a bus tomorrow.

But if you expect to live to a ripe old age, claiming Social Security at age 70 makes sense. It can add hundreds of thousands of dollars to your income over the course of your retirement.

When to claim Social Security is likely the single most important financial decision you’ll make in retirement. So give it some serious consideration!

Money & Markets contributor Charles Sizemore specializes in income and retirement topics. Charles is a regular on The Bull & The Bear podcast. He is also a frequent guest on CNBC, Bloomberg and Fox Business.

Follow Charles on Twitter @CharlesSizemore.