Why Taking Social Security Early Could Be the Better Bet — Even for the Long-Lived
Deciding when to claim Social Security is one of the most consequential financial choices retirees face. While your monthly benefit is tied to your earnings history, the age at which you file determines just how much the Social Security Administration sends you each month.
If you claim at full retirement age — typically 67 for those born after 1960 — you receive 100% of your benefit. File early, as early as 62, and your monthly checks are permanently reduced. The earlier you claim, the bigger the haircut: filing at 62 yields a roughly 30% reduction compared to waiting until 67.
On the flip side, delaying benefits past full retirement age earns you an 8% annual increase, up until age 70. That's a powerful incentive to wait — especially if you expect to live a long life.
But here's where the conventional wisdom gets complicated. While waiting until 70 can maximize your lifetime payout if you live into your 90s, there are compelling reasons to consider filing earlier — even if you're in excellent health and longevity runs in your family.
The numbers game — and what it misses
Let's run the math. Suppose your full retirement age benefit at 67 is $2,200 per month. If you file at 62, that drops to $1,540. Wait until 70, and it climbs to $2,728. If you live to 95, the total lifetime payout from delaying is significantly higher.
But that simple comparison overlooks a critical factor: the value of having cash in hand sooner.
Claiming early can relieve pressure on your retirement savings during the early years of retirement — a period when many portfolios are most vulnerable. If the stock market takes a dive soon after you retire, and you're relying entirely on your 401(k) or IRA for income, you may be forced to sell assets at a loss. That can permanently impair your portfolio's ability to recover — a phenomenon known as sequence-of-returns risk.
By taking Social Security early, you reduce the amount you need to withdraw from your investments, giving them more time to bounce back.
More than just a spreadsheet decision
There's also a lifestyle angle. Many retirees dream of traveling, pursuing hobbies, or spending time with grandchildren while they're still healthy and active. Waiting until 70 to claim benefits could mean missing out on those years.
“I see clients all the time who waited too long and then couldn't do the things they planned because of health issues,” says Margaret Chen, a certified financial planner based in Austin. “You can't put a price on being able to enjoy your money when you're still able-bodied.”
Not everyone agrees. Tom Grady, a retired accountant in Phoenix, says the math is clear for him. “I waited until 70, and I'll collect an extra $1,200 a month for the rest of my life. That's money my wife and I can count on. I don't get the people who rush to claim at 62.”
But for others, the trade-off is worth it. Linda Ortiz, a 64-year-old former teacher in Ohio, filed at 62 despite being in good health. “My husband passed away at 58. We had all these plans. I wasn't going to wait around for a check that might never come. I wanted to live my life now.”
The bottom line
Delaying Social Security can boost your lifetime income if you live into your 90s or beyond. But it's not the only factor. Claiming early can protect your portfolio from market downturns, fund experiences while you're still young enough to enjoy them, and reduce financial stress in your 60s.
As with most retirement decisions, there's no one-size-fits-all answer. But for many retirees, the conventional advice to wait may not be the wisest path — even if you expect a long life.
This article was originally published by The Motley Fool and has been edited for clarity and style.