When should I take Social Security?
It's much more than a math problem
“Russ, when should I take Social Security?”
I get this question regularly.
And almost every time, she already knows what she’s “supposed” to do.
Wait until 70.
Maximize the lifetime benefit.
Because that’s what her brother-in-law did. That’s what she read in the Wall Street Journal. That’s what the online calculator told her.
But there are some assumptions baked into this one-size-fits-all approach…
So she pauses and asks the real questions:
What if I wait until 70 but die at age 73? Or at 68? Or 81?
What if the market drops and I have to sell investments while the market is down?
What if I’m uncomfortable spending down my savings while I wait?
Those questions matter more than any formula.
Why the “wait until 70” rule misses the point
Most Social Security advice treats your benefits claiming decision like a math problem with one correct answer.
The typical analysis goes like this: if you delay from 62 to 70, your monthly benefit grows by about 76%.
More money is always good, right?
Even if you have to wait another 8 years to get it?
Run the numbers through a break-even calculator, and you’ll see that if you live past your early 80s, waiting pays off in more total lifetime benefits.
Case closed, right?
Nope.
That analysis assumes you care only about the total dollars you’ll receive over your lifetime.
But your life isn’t a spreadsheet.
You have preferences, concerns, and goals that don’t show up in a break-even table.
Let me show you what I mean.
Factors the calculators ignore
When I sit down with clients to talk through Social Security, we look at more than just cumulative benefits.
We talk about:
Spending comfort
Research shows retirees spend about 80% of their guaranteed income (think Social Security or pensions) but only 50% of what they could safely withdraw from their portfolio.
If you’re someone who feels nervous spending down savings, claiming Social Security earlier gives you more guaranteed income.
That might actually help you enjoy retirement more, even if the total lifetime dollars are lower.
Market timing risk
If you delay Social Security, you’ll likely have to pull more from your investments in your early retirement years.
Those first five to ten years are when sequence of returns risk matters most.
I’ve run scenarios where claiming at 62 instead of 70 during a market downturn left a portfolio $400,000 higher by age 80, simply because the client wasn’t forced to sell stocks at depressed prices.
Legacy goals
If leaving money to family or charity matters to you, dying before your break-even age isn’t just “bad luck.” It’s a missed opportunity.
One analysis showed that if someone claimed at 62, invested those benefit checks, and passed away at 70, they could leave behind nearly $400,000 that wouldn’t exist if they’d waited.
Policy uncertainty
You might worry about Social Security’s long-term funding or potential changes to how benefits are taxed.
Only 36% of Americans feel confident in Social Security’s future.
That concern is real, even if the trust fund isn’t likely to run dry in your lifetime.
Your health and family history
If longevity runs in your family and you’re in great health, delaying makes more sense.
If you have health concerns or a family history of shorter lifespans, claiming earlier deserves serious consideration.
The thing about the future
When it comes to Social Security, or any decision about the future, you can’t know exactly what will happen.
Or when.
You don’t know if you’ll live to 94 or pass away at 67.
You don’t know if the market will soar or crash in your first few years of retirement.
You certainly can’t predict future tax law changes.
But you can look at the range of possibilities, decide what you’re most concerned about, and make the choices that feel right to you.
“There are no solutions, only trade offs.” - Thomas Sowell
Your Social Security decision works the same way.
What to do next
If you’re trying to figure out your claiming strategy, here’s how to think it through:
Start with your priorities
What matters most to you?
Maximizing lifetime income?
Protecting your portfolio early in retirement?
Leaving a legacy?
Having guaranteed income you can count on?
Look at your actual numbers
How much would you need to withdraw from your investments if you delay Social Security?
Can your portfolio handle that, especially when (not if) markets drop?
What would your monthly budget look like at different claiming ages?
Consider your comfort level
Are you someone who’s comfortable spending down savings and investments, or does that make you anxious?
Do you worry more about living too long or dying too soon?
There’s no right answer… just your answer.
Factor in your health and family history
If longevity runs in your family and you’re healthy, delaying might make more sense.
If you have reasons to think otherwise, that deserves your attention.
Get help if you need it
An experienced advisor with the right planning tools can model your specific situation and show you how different claiming ages affect your entire financial plan, not just your Social Security benefits.
This isn’t about delegating the decision. It’s about making sure you’re seeing the full picture.
Bottom line
The best Social Security claiming strategy isn’t the one that maximizes your lifetime benefits.
It’s the one that fits your life, matches your priorities, and lets you retire with confidence instead of second-guessing.
Your brother-in-law’s decision doesn’t matter.
The generic advice in the financial press doesn’t matter either.
What matters is what works for you.
Links & things
For more on the topic of Social Security retirement benefits, check out:
Completely unrelated to Social Security, Elizabeth and I recently watched a movie that we really enjoyed:
But don’t take my word for it… as the Rotten Tomatoes link above will show you, the critics didn’t like it but regular movie goers loved it.
Which is always a good sign in my experience.
Thank you for reading!
If you ever have any feedback or suggestions for me, simply hit reply or leave a comment and share what’s on your mind…
Until next Wednesday,
Russ
This really nails the psychological angle most advisors skip. Ran into this exact thing when a friend kept delaying becuase the calculators said so, but ended up way too nervous to actually spend anything. The behavioral side of guaranteed income matters more than people think and once they have that steady flow they're way more willing to enjoy the discretionary stuff.
Very helpful, and agree. However, as someone who did not wait until turning 70, let me add 2 cents. There could also be circumstances that are not anticipated. I was very happy at my last job for almost seven years. There was no way I could have known about the shakeup that led to my retiring ahead of MY schedule. Also the Social Security Calculator makes certain assumptions about your future earnings that might not happen. When crunching the numbers it is also helpful to think about what you won't be spending money on once you retire. In my situation, I have been saving a lot of money on gas, insurance and wear-and-tear on my car. Not to mention (as a woman) not having to pay to get my hair cut and colored every other month, or spending on make-up and clothes. These are just the most obvious expenses in my case. Everyone is different and must really look at their own situation when deciding on when to take social security. One final note, I had a co-worked who was forced to retire even earlier and start taking social security at 62 after being diagnosed with a chronic, serious health condition.