Should You Take Social Security At Age 62 Or 70?

Should you take Social Security At Age 62 or 70?  It’s a difficult question to answer, but answer it you must.  Today, we’ll run you through the numbers.  This post will compare, by using our ACTUAL Social Security projections, the impact of taking Social Security at Age 62 vs. Age 70.

Hopefully, this will help you answer the question:

Should You Take Social Security At Age 62 or 70?

One decision which every retiree must make is when to start Social Security.  While most folks traditionally start their SS at the earliest possible date, it’s encouraging to see evidence that more folks are deciding to delay.  Currently, 48% of women and 42% of men start their SS at age 62, down 10% from a decade earlier (Source:  The Most Popular Ages To Sign Up For Social Security). 

Why are more folks deciding to delay?

I suspect folks are starting to realize that longer you delay the start of Social Security, the higher your monthly payments will be.  The difference from delaying can be startling.  See my statement below.

Here's our actual Social Security estimate: $2,060 At Age 62 vs. $3,643 at Age 70. Is it worth waiting?? Click To Tweet

Our Social Security Statement:

Here’s a screenshot of my ACTUAL Social Security estimate, which I pulled from the website:

Look at the numbers – my payout at Age 70 is $1,583/month, or $19k/year higher than my payout age 62.  That’s a 77% increase!!  If you run the math, I’ll earn a 7.4% return for every year that I delay Social Security.  Tough to beat that kind of a return in any other asset class at the moment.  Even better, it’s essentially a risk-free return of 7.4%.  Hmmmm.  Interesting.

My Social Security Payment Will Be 77% Higher If I Wait Until Age 70! Should I Wait? Click To Tweet

Let’s look further…..

Age 62 vs. Age 70 – Two Scenarios

Using the values from Social Security, I created a simple spreadsheet to compare the two scenarios.

  • Scenario I:  I start at Age 62 and receive $2,060 per month.
  • Scenario II:  I start at Age 70 and receive $3,646 per month.

From there, I increase the payout each year based on an assumed 3% annual inflation rate:

At first glance, folks may jump to the conclusion that Scenario I is the best option.  Look at that Cumulative Column!!  By taking SS early, you’ve earned $351k by Age 73.  Delay your SS, and you’re $168k behind, with only $183k in cumulative payments.

However, there comes a point in the future where the cumulative payout in the “Start at 70” scenario catches up, and passes, the “Start at 62”.

In our case, it looks like “Break-Even Point” happens at Age 84:

For each year I live past Age 84, the benefit of delaying until Age 70 increases.  For those of you who prefer pictures, here’s the same data in graph format.  The Red line is the “Start At 62” scenario, the Blue is “Start at 70”:

Note that in the above analysis that if we delay until Age 70 we’ll come out with ~$258k MORE Social Security by Age 95 than if we took it at Age 62.  This “benefit to delaying” continues to grow with age.

The longer you live, the better off you’ll be by delaying.

What About Taxes?

The above analysis ignores taxes (oh, a dangerous way to do an analysis….so let’s go there next).

First, Is Social Security Income Taxable?

Most Likely.  But….it depends.

To keep it simple for the sake of this analysis, the answer is that Social Security is currently taxable if you’re married and your “combined income” is over $32k.  To determine “Combined Income” for Social Security taxation, you add your Adjusted Gross Income + 50% of your Social Security Income.  If that amount is between $32k – $44k (married), 50% of your social security income is taxed.  If your Combined Income exceeds $44k, 85% of your Social Security income is taxed at your marginal tax rate. Here’s the IRS worksheet if you’d like to check if your benefits are taxable.  Depending on where you live, you may also have to pay state taxes on the social security income.  Read this article from Motley Fool for the details.

For the sake of this article, let’s assume that 85% of Social Security is taxed at your marginal tax rate, and you live in a state with no state income tax on Social Security.

Second, What If Future SS Income Pushes Me To A Higher Tax Bracket?

Ok, we’re going to “Graduate Level” content now.  Those of you who really understand this stuff may argue that you’re better off taking your SS early.  After all, if you delay, those higher payments might push you into a higher marginal tax bracket.   That’s bad, right?  If I can take it earlier, and at a lower tax bracket, would I be better off in the long run?

What does that look like?

Before we do that, a quick glance at the current tax brackets (subject to change, especially with current legislation in Washington):


The Worst Case Tax Scenario

To model the “worse case” impact of taxes, we’ll run a scenario where a couple pulls their SS early, while still at a 15% marginal tax rate.  At Age 70, RMD’s and Social Security increase their marginal tax rate to 25%

  • Scenario I:  Start at Age 62 @ $2,060 per month.  15% Marginal Tax Rate until Age 70, then 25%
  • Scenario II:  Start at Age 70 @ $3,646 per month.  25% Marginal Tax Rate throughout

For those who prefer pictures – the same data in graphical format:

Bottom Line: Whereas the “Before Tax” analysis showed a break-even point of Age 84 (yellow boxes in the table above), the “After Tax” analysis pushes the break-even point out by 1 year,  to Age 85 (red boxes).  This makes sense since there’s a “bump” to scenario I with the first 8 years only being taxed @ 15% marginal tax rate.

Looking at Social Security Payments AFTER-TAX moves the Break-Even point out by 1 year, to Age 85. Click To Tweet

Regardless, even in the “After-Tax” analysis, delaying the start of SS to Age 70 results in a net cumulative benefit of $185k by Age 95.

Again:  The longer you live, the more sense it makes to defer the start of your Social Security.  Taxes don’t change this fundamental concept of delaying Social Security.

Other Considerations For Age 62 vs. Age 70

In addition to the (not so) simple math, there are some other more “subjective” elements which you should take into consideration as you make your decision:

What If Social Security Runs Out Of Money?

Many folks worry that SS will run out of money, so they feel justified in starting payments as soon as possible:

Some Folks Take Social Security Early - Best To Get It When The Gettin's Good! Or is it? Click To Tweet

Personally, I don’t expect “SS Will Run Out Of Money”, but I do suspect there will be tax changes and other “adjustments” to address the widely touted funding gap.  I suspect SS payments will become increasingly “means tested”, and those who have been responsible and saved a nice nest egg will see their SS payments cut as a result.

No way to know until it happens, but I suspect I’ll never see the full payments that I see when I log into my SSA account.  In our Retirement Cash Flow projection, I cut our Social Security to 75% of the levels shown in this post.  Better to be conservative, in my view.

Do You Have Enough $ To Fund the 8 Year Delay

One of the primary reasons many folks start their SS at Age 62 is simple:  They don’t have enough other income, and they need the money.  Clearly, you need to have sufficient liquidity to fund the 8-year delay before you decide to defer your Social Security start date.  While the longer term benefit may be sacrificed, there’s certainly value to many folks in getting “Less Money, But Getting It Sooner”.

Increased Sequence Of Return Risks

If you chose to delay the start of your SS, you’ll need to pull more heavily from your investments from Age 62 to Age 70.  As Dirk Cotton correctly points out in this post, those heavier cash flows from your investments increase your Sequence of Return risks in your earlier retirement years.  If the market tanks when you’re Age 63, will you have enough “dry powder” set aside to fund the higher required cash flow until Age 70?

Will You Die Early, Or Live To 100?

All else aside, Longevity is the biggest factor in the decision to defer.  If you have longevity in your family and end up living to 100, you’ll benefit by delaying your Social Security.  If you die younger (especially if it’s before your Break-Even in your mid-80’s), you’ll benefit if you start sooner.  However, even if you die young, your spouse may benefit from higher spousal benefits if you’d decided to defer. No one knows when they’re going to die, but you should consider longevity as you work through your decision.

Our Decision On When To Take Social Security

Strangely, none of this analysis applies to me.  I’ll only be 55 when I retire next year, so I don’t have to decide anything for another 7 years.  I suspect the topic of Social Security will undergo significant change during those 7 years, and I’ll be required to conduct an entirely new analysis when I get closer to my decision point.  If I’m still writing in 7 years, watch out for another post on this topic!

Therefore, this analysis is primarily for my readers who are currently making the decision (you’re welcomed, by the way!). 

However, If I were forced to decide today, I’d likely decide to defer until Age 70.  I have very few levers available to me to protect against longevity risk, and I’d be inclined to pull this lever as one means of minimizing my risk of living to 100.  Similar to my view on longevity annuities (see my post What Role Should Annuities Play In Retirement),  I like the idea of Risk Management techniques which offer me a way to minimize my risk of a long life.  I plan on being around a while, and I want to make sure I protect my cash flow in my later years.


While the decision on “Should You Take Social Security At Age 62 Or 70?” is complex, the reality is fairly simple.  The longer you live, the bigger your advantage of delaying the start of Social Security.  Think of it as a “longevity annuity”, where you may choose to spend your “own money” from Age 62-70 in return for a higher lifetime annuity if you live past your mid-80’s.

The decision on when to start your Social Security is a ~$200k decision, as shown above.  Take time to understand it, and make the decision that’s right for you.

Longevity risk (outliving your money) is one of the Top 5 Retirement Concerns and the option of delaying the start of your Social Security is a viable strategy to ensure income if you live to 100.  However, make sure you factor in the other considerations outlined above before you finalize your decision.

What about you?  Have you decided when you’ll start your Social Security, and why?  I look forward, as always, to your comments….


  1. Very nice analysis, Fritz!

    We’re of like mind. At the moment we’re thinking Mr. Groovy will take his at 70. And I’d take mine at full retirement age, 66 and 10 months.

    The biggest tax concern for you may be those Required Minimum Distributions (RMDs) from your 401K, although I believe you’ll be doing Roth conversions before you start receiving social security payments. We’d be doing them right now if it weren’t for Obamacare.

  2. Great analysis! Do you offer retirement consulting? 😉 I won’t have to think about this one for a few decades, for better or worse, so who knows what will change between then and now. But I’m sending on to parents and in-laws for sure.

    1. Retirement consulting? Wow, what a compliment! I’ve considered it, but don’t have the time. I have helped a few co-workers “run their numbers”, but I’m not able to offer it to the public at this time. Perhaps in retirement I’ll get into retirement coaching, haven’t decided yet. Thanks for the compliment, much appreciated!

      1. Yes, Fritz, you can consult for me man! This is a fantastic post and one I’ll bookmark for future reference. I always assumed I’d just starting taking it at 62 so I could invest it, but I might not make up for the difference vs. waiting till 70. Thanks for the handy graphs – visual knuckleheads like me need all the help they can get. 🙂

  3. My view on when to take social security comes down to this: if you don’t need it to live on, take it at 62 but if you do need it to live on, delay as late as you can.

    If a person doesn’t need it, most likely they’ve been great savers and have attained a decent net worth in their 60’s and 70’s. Washington regularly discusses adding additional means testing to social security recipients. So it’s going to happen and my guess is we’ll all be surprised at how low the thresholds will be set. Therefore, take it as soon as possible because there will probably be a “grandfather” clause. I doubt it would be made retroactive once a person is already drawing. Then, save or invest it.

    Unless there is a “look back” once additional means testing is applied, current recipients who don’t need SS to live on will be glad they took it early. While the additional 7% return sounds great, if and when this happens we’ll look much differently at the 7% return. Meaning that if means testing is applied and you now qualify for zero SS payments, but you could have drawn at 62 and been grandfathered in, that potential 7% return will turn negative.

    You should take it as early as you can.

    1. I agree with Jay for all those reasons which he stated more eloquently than I. Plus, if you have decent savings, you will need to draw down LESS waiting for Age 70. Those (even with a 50-50 asset mix) could do better than 7 percent.

      Finally, the men in my family have not lived past 84 for three gen-gen-gen-generations. (Apologies to The Beach Boys).

    2. Valid opinion, Jay, and certainly one of the “other considerations” I was thinking of in the post. While the straight math may lead to one conclusion, a more holistic consideration (including legislative changes and the high possibility of “means testing”) could certainly be used as an argument to take Social Security at the earliest possible age. I’m continuing to monitor, and will make the decision when it needs to be made! Thanks for stopping by with your great contribution to the discussion.

  4. Fritz, thank you for the analysis.

    I think either the “Annual” column heading that you use in the tables is incorrect or the amounts shown in the “Annual” columns for each year is incorrect. The amount shown is the monthly amount, not the annual amount.

    The breakeven age in the mid-80s probably doesn’t change.

    1. Wow, you are absolutely correct! How in the world did THAT happen! Egg on face. Clearly, it’ll change the cumulative difference between the scenarios. Heading into my spreadsheet to fix it now. I can’t tell you how many times I read this post before hitting “Publish”, funny how we miss the obvious things sometimes, right! Thanks for the catch.

  5. Hi. I retired at 62 ( 14 years ago) People asked me why I would retire so early? So young? By the time I retired I had worked 54 years. I had a paper route that required me to get up at 5am/5days week. I was 8. I worked my way thru HS and college and graduate school and my PhD program. I worked overload courses each term. I had a wife, 2 kids, a mortgage, 2 cars etcetcetc. Had to save for retirement. Had to save for 2 college educations.
    When I retired at 62 I got less money, yes. But my youngest daughter was 14. Because of SS I got an additional $1200/mo. until she turned 18. Used 1/2 for living expenses (you know, a teenaged daughter) the other1/2 for her college fund. This way she was able to attend the top private university of her dreams. She rocketed!
    But, don’t look down at retiring at 62. I earned it. And I am living the retirement of my/our dreams with the same pretty coed who was in my first university class I taught 44 years ago.

    1. I love your story Dr. Jack, thank you for sharing it with the readers. Hope you and your “pretty co-ed” continue to have the retirement of your dreams.

  6. I agree with the sentiment of Jay (above). The less you need it, the earlier you should take it, to hedge the risk of the program changing in a way that is not in your favor. I also think the benefit of taking it early reduces the amount that is subject to your marginal tax rate. After age 70, with the expectation of large RMDs, much of this benefit of deferral May be taxed at high marginal rates, 35% or higher (currently).

  7. My wife is a teacher with some private-sector years as well. She gets hit with the Windfall Elimination Provision (WEP). This means the SS benefit is calculated differently and is much less because she will be collecting a pension from TRS. This is another variable that factors into our decision. The spousal benefits can be affected by the decision on when you start to collect. Not something anyone likes to think about but it can really have an impact in the future. There is quite a bit of due diligence required before making the SS decision. I have found that the information about all the variables and how they impact the benefits are not easily found and can be complicated. Your post lays out some good points to consider. Well done!

    1. “There is quite a bit of due diligence required before making the SS decision.” Exactly my point, F&B, thanks for making it so well. Each situation is different, as you so eloquently show with your WEP situation. Thanks for the compliment on my work, I hope it helps folks to think a bit deeper about their decision on when to claim their Social Security.

  8. Great break down…so I guess the decision comes to lifespan. If you are healthy and swing outdoors every month then delay. If you have a lot if med problems or no cash to live then take the money and run.

    1. Longevity is certainly a major factor in the decision, Dad. The benefits of keeping oneself healthy extend into may areas of post-retirement life, including a potentially greater lifetime of income from Social Security. I guess I’ll keep going with that crazy outdoor swimming!

  9. My situation is similar to Jack’s in many ways. Started work early – married and had kids young – still married. Worked through HS and College. Actually went back to school twice to finish two college degrees but couldn’t afford to stop work otherwise. I am a medical professional and ultimately spend 20 years in the National Guard and 23 at the VA concurrently. I “retired” from both and have worked as a government contractor since. My end result is that I am now working PT and look to likely fully retire in Sept. I start SS next month at my Full Retirement Age. I get two modest pensions now. That plus the SS will actually equal what was my fulltime pay – so I have elected to not delay until 70. I will not sit and do nothing – plenty to do with my time not even considering golf, fishing, etc.

  10. Just a reminder that the $2060 estimate from SSA, assumes that you continue working at your current income until your retire. So if you retire at 55, your actual number will be less, unless you’ve already worked 30 years at the same income.

    I have about 20 years before I have the option of taking SS, so I do think there will be changes by that time. Currently, I’m not expecting to need SS, but I won’t turn it down. And in my spreadsheets, I include a 25% discount off my current estimated payment, in case they don’t adjust the SS trusts by then.

    1. Good point, SC. I’ll have a full 35 years of qualifying work, tho the early years will be lower. If I continued to work for a few more years, I would replace those “lower income” early years in the formula with “higher income” later years. It’s not a big factor in my calculation, but you are technically correct.

      Good move to apply a 25% discount to your SS projections. I’m doing the same thing. Better to plan for the worst, and hope for the best!

      1. Yep, that comes from the Social Security trust fund annual report.

        “After 2021, interest income and redemption of trust fund asset reserves from the General Fund of the Treasury will provide the resources needed to offset Social Security’s annual deficits until 2034, when the OASDI reserves will be depleted. Thereafter, scheduled tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2091. “

  11. You forgot one big consideration, at least for us, Fritz.

    If you have minor children when you take social security, there is a benefit for them as well until they turn 18. Since my husband was 50 when our daughter was born, this is a major factor in our calculations. Even though his later benefit will be less, our initial benefit will not because of the dependent clause.

    1. Great add, Emily. It’s not a factor in our situation, so I didn’t include it. In your situation, I agree it’s a major consideration. Another great example of how each of us have to make this decision based on the actual facts of our unique situation. Thanks for stopping by!

  12. I will still take it as 62. Here are my reasons:
    1. It is always good to have extra cash sitting on your bank account, to act as a buffer to any adverse things
    2. As you have shown, until the age of 84/85, taking early still leaves you more cash in your bank account.
    3. Even if we live till 95, the choice of total is 1.1 Million vs 1.3 Million. $185k difference on this huge amount (amounts to only 15% diff). This is not significant in my mind. The difference in annual income is only $18,000 between the 2 choices.
    4. If i has nest egg (of say $1 Million) at 62 when i started my social security payments, then i would not have dipped into my nest egg that time. Instead i can dip into it to take $18000 every year from that afte ri turn 84 or 85.

    1. A great example of why it’s called “Personal” Finance, Hari. I’d never argue with someone making the decision that’s best for them, as long as they’ve thought deeply about the details rather than just doing something without working through their logic. It sounds like you’ve thought about it, and I applaud you for having strong logic for your decision.

  13. Fritz, This is an analysis that is marked by your usual careful thinking and increasing wisdom, even though you are still so young! There is another interesting factor at work, which most people have not yet made much of–SS payments for most people have actually decreased over the last three years, not even counting the government’s fiction that there has been zero inflation. Go to the grocery store for the next six months, just once a week, and then tell me there is no inflation! Anyway, the whole ballgame with SS is not only that it is a ponzi scheme or that one could make much more investing one’s own money, but that we should be advising our grandchildren (as I am) to pretend there is no such thing, to ignore their stated income and deal with their real income, plan entirely on their own for retirement (if there is any such thing in forty years), and thus do one more thing to cut themselves off from the psychological part of government!

    1. John, thanks for the kind words. I agree with your suggestion that we advise younger generations to assume SS won’t be there for them. It’s certainly on weak legs, and I suspect this benefit will face severe pressure in the coming years. Always best to be Independent of Government, just like a great little college I love in Southern Michigan! Thanks for stopping by!

  14. Fritz, thank you so much for this post. Also appreciated Jay and Jack’s comments above.
    We are about to retire in 2018 at 64 and 63–2 and 3 years away from Full Retirement Age.
    Our plan is to wait at least until FRA and make ROTH conversions in the meantime in the lowest tax brackets possible.
    In fact we are going to Fidelity tomorrow to initiate mini-ROTH conversions just to get the 5 year clock running on our ROTH accounts. (100% of our retirement accounts are pre-tax).
    We want to do this for 3 reasons: 1. Increase our future SS payments, 2. Reduce our Required Minimum Distributions at ages 70 1/2,, and 3. Convert a portion of our retirement accounts to a tax-free asset that can go to our children. We understand there is no step-up in basis for a traditional 401’s, etc..
    Thanks again for a helpful and timely post for us.
    I wish you would be our retirement coach, also, Fritz.
    Would love to know if I’m missing something with this plan.

    1. “….and make ROTH conversions in the meantime in the lowest tax brackets possible.” Great strategy, Cyn. We’re doing something similar ourselves during the “early retirement years”, and will be delaying our pension to allow maximum ROTH conversions. Required Minimum Distributions scare the heck out of me…..

      Hmmm….two votes for “Coach Fritz”. Thanks for the confidence. Your plan sounds solid, and it sounds like you’ve done a lot of thinking about it. Sorry I can’t work through your detail, just not enough hours in the day!

  15. What if I don’t need the money, but take it at 62 and invest it instead? Even at the very low safe interest rate today, when would the break even point be then?

    1. Mary, I view it as an arbitrage between the ~8% return you’re guaranteed by delaying vs. the return you could make on money invested if you took SS at Age 62. I suspect it would be very difficult to earn 8% in today’s market environments, and it would most certainly NOT be a guaranteed like that offered by Social Security. You’re thinking the right way, but I suspect earning enough to justify the early claiming date on SS would be difficult to pull off.

  16. Great post Fritz, I’m glad you’re studying this and particularly the tax impacts.

    I looked at this recently and rolled in the investment of the SS proceeds in though I neglected to consider the tax impacts as you wisely did. With a lower COLA and 8% investment returns, taking it early makes sense unless I live well into my 90’s.

    Here’s my post if it is of interest: When-should-you-claim-social-security

    Great article . . . as always!

    1. Liz, thanks for adding your link, heading over now to have a look. Glad to see others working on the problem, the more minds we have churning through this stuff, the better our ultimate analysis! Thanks for adding to the discussion!

  17. Good Morning Fritz. As a past business associate, I’ve enjoyed keeping up with your comments toward your early retirement goal. I’m sure success is near at hand for you and your wife.

    I just recently retired at the end of September and at my seventieth birthday, and for me the decision to wait was an easy one. I wasn’t looking for an early out as I enjoyed my work and wanted to continue contributing to my company’s success. Another factor is it gave me 8 more years to max out my 401k contributions and build equity. This was important to me as I hope to be able to leave my two daughters with some help as they are Iiving in a time of increased difficulty to save. I had hit 62 years old in 2009 and, as you know, all savings were taking a beating during that time. Had I started withdrawals then I would have missed out on this market growth. This wasn’t something I knew was coming, but I sure didn’t want to start withdrawals at the bottom of the market.
    I also am fortunate to have good health. As you mentioned, how long you live is the determining factor in how much your total Social Security payments will be. I’m gambling that I will live beyond the time when the lines cross on your graph. Beyond that, it’s all gravy!

    1. Larry, great to see you on my site, old friend!! Your timing of 62 vs. 70 certainly worked out well for you with the markets, and made your decision on when to start SS much easier than it is for most of us! You were blessed to have a job you could enjoy to Age 70, a rare situation for most folks these days. Good for you for prioritizing the help to your daughters, I’d expect nothing less from a man of your caliber. I’ve enjoyed working with you over the years, and wish you the best in your well earned retirement!

  18. Great article with many of the considerations needed to make an informed decision. One other consideration would be the need for the cash flow in the 62-70 age group due to travel and increased spending. It is proven that the expenses decline with aging other than healthcare. The increased cash flow of waiting to 70 may not be in time to go after those retirement travel dreams. People need to take their health condition into account for when the cash flow would be most appreciated. I am currently delaying to full retirement age and living off of my taxable account. The advantage of delaying is that if conditions change, it is easy to apply and start the cash flow.

  19. You don’t take into account that if you take SS @ 62, the money you don’t have to withdraw from your IRA continues to grow at some % (6%?) – this is not guaranteed like SS, but it should move the results past 85 for break even point, right?

    1. You’re correct, DT. Essentially, it’s an arbitrage between the 8% you’ll earn on the SS deferral vs. the return you can make on your outside investments. Assuming you could earn 8% on your investments (unlikely in today’s markets, in my humble opinion) both Age 62 and Age 70 scenarios would be identical if you viewed it from a total net worth / cash flow perspective.

  20. I don’t believe you can underestimate the Longevity risk. My mom (now 81) has Alzheimer’s and has been in a facility since she was 78. My dad hasn’t been able to walk very well since he was 75. Health can be a fickle thing. I would prefer to take it early and enjoy some of life before age catches up.

    Of course, some people have a history of long, healthy lives. One grandmother was healthy and active into her 90s. But one was not past 80.

    cd :O)

    1. Chris, no doubt longevity is a huge factor. Nothing wrong with taking it early, as long as you recognize the pros and cons. I’m hoping to live to a ripe old age, figured I’d better make arrangements to insure I still have some $$ coming in when I reach 100!

  21. Fritz, thanks for this thoughtful review. It is interesting that almost all analyses of this type (even those done by Social Security themselves) encourages delay till age 70. I have read that in fact, for the population as a whole, it really does not make any difference to Social Security, as the actuaries have figured that some will die before the “breakeven” age so payouts will not break the bank (at least not more than the current projections). One thing that is intriguing, if you do NOT need the funds at age 62, would be to compare breakeven on the Social Security at 62 being invested with a reasonable asset allocation that would project 6% returns. My instinct tells me that this projection would make it harder not to take the dollars earlier. Couple that with the longevity risk (in this case the opposite of typical) where you die before your mid 80s, and it makes me understand why some folks claim early. In my case I will claim at full retirement age, as I am still partially working now at 64, and try the investment route. We can compare notes in about 20 years!
    Quentin Humberd

    1. “….would be to compare breakeven on the Social Security at 62 being invested with a reasonable asset allocation that would project 6% returns.” Amazing minds think alike, Q. I wanted to find a way to capture the returns of the investment portfolio to show “net net net” results, but decided not to get into that much complexity. You are correct, the net benefit to deferral would be the net differential in returns between the guaranteed 8% from SS vs. the actual return you’d earn on your investment portfolio.

      Any chance you’d like to try to model that?? (you can see why I gave up and went with the simpler math!).

      I’ll look forward to hearing from you in 2037 (put a reminder in your calendar)….

  22. My wife and I are both 62 and have been retired for a few years so this is not at all hypothetical for us. However since my side gigs totally pay our bills without touching our investments all we’d do with the Social Security if we took it is invest what was left over after taxes. I think I’ll likely earn about the same amount or more until 70 as long as the side gigs stay enjoyable, so it is a no brainer to wait until 70. Your analysis is the best presentation of the issue I’ve seen to date, thanks!

    1. “Your analysis is the best presentation of the issue I’ve seen to date, thanks!”

      Music to my ears, Steve. Thanks. Congrats on having productive side gigs, I may have to pick your brain for some ideas in a few years…..

  23. Great post! Thanks for the deep-dive into the tradeoffs. As you wrote in an earlier post, you want to self-insure for long-term care expenses. Given that, delaying Social Security is a hedge against the nightmare scenario of 10 years of care expenses at age 80-90.
    I also want to point out that Social Security is set up to be actuarially fair for the average-health single person. For married couples with a high-income earner who’s a bit older than the low-income earner it normally pays to delay benefits for the high earner. If that SocSec-hack is still around when we get to that age, we’ll definitely make use of it!

    1. “Social Security is set up to be actuarially fair for the average-health single person.” Great point, as I’d expect from you Big ERN. Whch is why it makes such great longevity insurance, if we happen to “beat the odds” and live to 100, right?!

      Good point about spousal benefit optimization, I decided not to “go there” in this post to keep the analysis more focused. Thx for stopping by!

    2. That’s the exact situation that I will be in. If the spouse will be taking SS at the spousal rate of 1/2 the high-income earner’s rate, that factors in. When I turn 70, my wife will be 63. It might make sense for us both to start taking SS at the same time — late for her, early for me.

      Assuming her calculated benefit will be half or less than mine, the latest she should start taking it is 67 (FRA) since the benefit won’t become any higher after that.

      Also, I agree with others that the break-even point should be shifted a few years later because it’s unlikely you’ll get 0% return on the money get by taking SS prior to age 70. Even if you spend every penny, that allows you to leave other money invested and untouched. I think the true break-even point is in the late 80s.

      And all this will probably change in the next several decades, so I shouldn’t worry too much about it.


      1. Thx for stopping by, Doc. I agree the break-even should be shifted a few years later to recognize the time value of $ and the better than 0% return inferred in the analysis.

        I also agree, for those of us <60 years old, this analysis probably doesn't matter all that much because I suspect the entire SS structure will go through some serious modifications before we begin to draw income from the program. We'll keep watching….

      2. My husband took his Social Security at 70 and after running the numbers I took mine at 63. The only scenario that showed I should wait is if we both live to 100. Fritz, please let people know that even if the older retiree doesn’t have longevity in their family history, their spouse probably does. It will be beneficial to her if he waits until he is 70 because she will get his higher benefit when he dies. I think most people neglect this when they take social security before age 70. Maybe you could do a chart showing the spousal benefit.

        1. Cindy, thanks for the good addition to the discussion. Survivor benefits were outside the scope of my article, but are clearly a very important element in SS planning which folks need to understand. Clearly, waiting until 70 increases survivor benefits for the remaining spouse, and it’s another reason why waiting until Age 70 for the higher wage earner to claim SS often makes sense. Thanks for stopping by.

  24. Thank you for another great article. I had not considered the effect on sequence of return risk. Good point. Another thing to consider is that once you start taking benefits, the annual amount is increased by the cost of living. If we return to higher inflation, then that COLA could be larger than the 7.4% return you are guaranteed to get by delaying.

    1. If we get to COLA adjustments > 7%, we’ll have a lot more to be worried about than what age to claim Social Security! Runaway inflation would be absolutely devastating to retirees, and it is something I worry about with all of the easy money getting pumped into the system these days. Good point, tho, that Social Security is a better inflation hedge than some of the other options available to retirees. If you defer the start, the COLA math works in your favor, too, since the inflation is multiplied against a higher denominator (so, the X% increase results in a higher $$ based increase if you defer and start at a higher baseline).

  25. Hi Fritz,

    Our plan for benefits is exactly as ERN mentioned above. For the same reasons – Mr. PIE earning more than Mrs. PIE over our 19 years working in the US.

    Agree with the earlier commenter that readers who are retiring early (e.g age 51, 55 etc) , be very careful not to fall into to trap of reading the SS benefit projection numbers based on working to age 67. The site has a benefit estimator where you can enter retirement age and your SS earnings. Which you can pull down from the web-site once you set up an account. I ran my numbers through that AND also through the handy-dandy Physician on Fire spreadsheet he kindly provided on his great “Know Your Bend Points” post on SS benefits. I get an age 70 estimate for me (retiring at age 51) at $33,103 annually using both tools, give or take a few dollars.

    Here is the link to his post if your readers want to head over, check it out and run their numbers.

    1. Thx for sharing Doc’s ssa link, I went over and had a look! Good point about realizing benefits will be less if you don’t work to full retirement age, thanks for sharing resources for readers to check the impact on the benefits they should expect to receive!

  26. Thank you for writing this!!! The talk is so morbid with financial confused parents. My Chinese isn’t good enough to explain to them the math and logic behind it.

    “If you live longer, you can afford to wait.”

    “Who says I’m going to live long?” (They’re both perfectly healthy besides blood pressure.)

    “Do you need the money for anything?”


    “Then why take it out? -_-”

    We have money for them. They’ll eventually move in with us so we will end up flipping the bills. They don’t invest their money anyways so it’s much better in my opinion to wait.

    1. Lily, you’re a Saint for trying to help your folks. One thing I really respect about the Asian culture is the respect folks give to their parents. It’s lacking in many cultures, but a strong part of your culture. My mother-in-law lived with us for 4 years. We always felt it was the least we could do, given all that our parents have done for us! Had to laugh thinking about you trying to explain this stuff to your parents in Chinese. Too funny.

  27. Very interesting article and analysis, and just as interesting posts. I have always been a proponent of waiting until 70, but with your excellent analysis and the comments from all the other posters, I suspect it would be fine to take SS at full retirement age (66/67); I’m thinking the catch up age for that would be 87-88 and like the man said, it’s all gravy after that. I seriously doubt I’ll be globetrotting at 93, but you never know! Thanks for a great article.

  28. If you collect at 62 but don’t spend it, couldn’t you invest those funds and earn much more by age 95 than the $185K net cumulative advantage you earn from delaying until 70? In other words, if by age 70 you’ve collected $251K, you have 25 years during which that chunk of money would be growing for you. Over that time frame, using the Rule of 72 and a conservative 4% rate, $251K doubles in 18 years.

    So, you could save and invest the social security money from 62 to 70, then collect and spend the monthly earnings from that point forward. Meanwhile, the unspent $251K keeps working for you.

    Just another option to consider.

    1. Valid point, Ann. My analysis didn’t go “that deep”, but you’re right in pointing out that the $ accumulated from an early start of SS could be invested and make a return, which would push the break-even date out. Afraid that’s a bit beyond my analytical capability, but it’s a valid point. Lots of smart folks in here today, I like it!

  29. I have two comments which I will post separately to allow focus on each issue.

    From a cash flow perspective, SS is already out of money. That is, the cash benefits being paid out exceed the cash receipts from FICA taxes. That has been true since 2010. The Department of the Treasury has been funding the shortfall by increasing the debt held by the public.

    Can the SS cash flow shortfall continue to be funded by increasing federal debt? I hope not. The cash flow shortfall will increase sharply over the next few years. I think it is unfair to saddle our children and grandchildren with more debt in addition to the SS and Medicare taxes they will be required to pay.

    I think means testing or some other form of total benefit reduction needs to happen sooner than 2034.

  30. Like some commentors above, my wife and I chose to start receiving SS benefits early. Because we have accumulated a significant nest egg, and have no heirs who could benefit from it, our income for the next few decades should easily put us in the top 20% of retirees. If Social Security will be means tested – and I think it will – we are prime candidates for means testing.

    IMO, financial advisors should be explaining to customers how means testing could impact their retirement cash flows. While the method for funding SS shorfalls remains uncertain, I think it is prudent for future retirees to consider alternatives which should influence their decision about when to start SS.

  31. OK, I actually have a third comment.

    In comparing cash flow streams, would it make sense to discount future cash flows? If I were doing this analysis, I think I would use a risk free rate of return for such discounting.

    If you have used DCF in your analysis, I apologize for missing that.

    1. All 3 points are valid, John. SS will likely be restructured, there will likely be increased “means testing” (making a stronger argument for taking it early), and a “discounted cash flow” would have been a more technically correct way to do the analysis. A dollar in hand today is always worth more than a dollar promised tomorrow, especially if that dollar promised tomorrow may not appear (means testing!).

      Great addition to the discussion, thanks for the comments.

  32. Great analysis! You might want to show how delaying helps your spouse even if you don’t live to 85. I think it will change some minds.

    1. Cindy, good point. I made a brief comment about the potential impact on spousal benefits, but excluded the details in this analysis. No doubt, delaying would increase spousal benefits, even if the primary claimant dies before the break-even age.

      1. Yeah, I was thinking this too. I’m the higher earning spouse — given that my wife is just 6 months younger and has a family history where all 4 of her grandparents lived into their late 80s/90s (some still alive) and all my grandparents plus my dad were dead by 82 or younger (in some cases much younger), there’s definitely a strong argument that I need to delay until 70 to make sure she gets my maximum, inflation adjusted benefit should I predecease here and she lives to, say, 100 or so.
        So, again — definitely factor in the spousal benefit when making the decision when between 62-70 to claim Social Security. It may make sense for one spouse (typically the lower earning spouse) to claim at one point earlier, and the other spouse (the higher earner) to delay to 70 to maximize the surviving spouse’s payment when the first spouse dies.

        Plus, I just don’t think there are many guaranteed 7% returns out there. If things change, obviously reassess…but really, Social Security is an easy thing to fix that will get fixed (probably by lifting the cap on what is subject to Social Security taxation, plus some type of means testing/less generous inflation adjustment plan). I’m not worried that it’s going away — it’ll be here a long time, and, in fact, may get more generous/better (seriously, it’s not that hard to fix it at all).

  33. Hey Fritz. Mrs Groovy and I are following the exact same claiming strategy as you and Jackie. Mrs Groovy will wait until she’s almost 67. I’ll wait until 70. My main motivation is to maximize her mailbox money when I’m gone. Your yeoman work has only confirmed the merits of our strategy. Thanks for the great analysis. You’re truly a font of wisdom on anything regarding retirement. And wasn’t Emily’s contribution awesome? Just more proof that personal finance is indeed personal.

    1. “Mailbox Money”. Stated as only the infamous Mr. Groovy could say it. Font of Wisdom? I’ll take it!

      And yes, Emily’s contribution was awesome! I’m pleased to see the level of discussion in these comments, and the reality of how personal situations can change one’s strategy. Exactly why we’re here!! Loving it!!

  34. For those who were born before Jan. 2, 1954, there is an additional consideration. At FRA, you can claim a spousal benefit using your spouse’s earnings record. The spouse has to be claiming SS in order to employ this strategy.

    In our personal case, I am the slightly older spouse. I also happen to have significantly lower SS benefits (stayed out of the workplace while the kids were growing up). I filed for my benefits at 65. When DH turns 66 in 2019 he will file for spousal benefits based on my SS, meaning he’ll receive monthly checks for 50% of my benefit amount. We plan to allow his benefit to continue to increase by 8% per year until he turns 70, at which point he’ll file for his own monthly benefits.

    Presuming no rule changes occur, for the first six years of SS this is what will happen:
    Year one: my SS check for $1600 per month (DH aged 65 – no SS check for him because SS requires we wait until spouse turns FRA of 66 before claiming these benefits.)
    Year two through five: DH age 66-69: two SS checks that total $2400 per month (my full and his 50% spousal)
    Year six and beyond: two SS checks that total $4450 per month

    Presuming one of us predeceases the other and does so after DH turns 70, the widowed spouse would get the higher amount of $2850 per month for life. While we may not both live into our eighties, it’s a reasonable bet that at least one will, especially since all of our parents have lived past 90. That $2850 check will go a lot further than the $1950 if he files at 65.

    Until he turns 70 we’ll use funds from part time work, savings and investments to supplement our income. The scary part is drawing down savings during the early years of retirement, but that’s because we’ve had a 40 year mindset of watching retirement funds grow. Watching them shrink will take some getting used to.

    There are so many moving parts to this puzzle. Thanks for the great blog and interesting comments.

    1. JCarol, wow, what a great comment on optimizing spousal claiming strategies! You’ve clearly done your homework, and the addition to the discussion is much appreciated!! I didn’t get into the spousal claiming element of SS in the post, but you’ve done a great job of adding a real life example of how to do it right! Thanks for your comment, much appreciated!!

  35. This is definitely something to consider! I might run those same numbers and also look at what happens if I don’t need it to live on and I invest some or all of it instead. I’ve thought for many years that it won’t be there for me when I get to the full retirement age so I am trying to make sure I don’t *need* it to live comfortably. If I don’t need it but I decided to take it anyway (why let the government keep my money any longer, it’s just more time for them to squander it away), then I *might* could make more by investing it…

  36. I may have missed or scanned past the impact of income earned if drawing SSA; the easy answer is there’s no intent by a bunch of FI afficiandos to earn after age 62? While it makes for easy analysis, not sure about reality. Income makes “delay” an easy choice.

  37. I love this wonky post. I sometimes think about switching to a different employer to get more Social Security Benefits (I work for a state where their employees don’t take out SS). My payment at 62 will be $350. However, I think that the 62 makes sense because you can also take that money and put it to work, which can make up for the difference you would have at age 70.

  38. Social Security is only half the puzzle, especially when considering taxes.

    Required Minimum Distribution (RMD) is the other half. Legally you *must* start to withdraw your RMD when 70-1/2 rolls around, and that is taxable too.

    So Social Security *plus* RMD will define which tax bracket you are in.

    You can read my analysis of RMD here:

  39. I have come to the conclusion that I will take it in 10 years at 65 (you can take it at any point between 62 and 70, you are not locked into 62, 67, 70). This is the age that medicare starts. I plan to work part time at my discretion until then. I think this is a good compromise.

  40. Thanks for the topic! After reading this, I see we need to stay limber and be prepared to adjust if SS re-work creates major changes. Really worried about means testing, but hopefully we’ll have enough even if it’s bad. Would be great if any legislation would delay action for those closer to retirement, but the decades long neglect isn’t likely to allow that indulgence.

    We hope to 1) early retire at age 60 — he’s 55, I’m 59, 2) live off trad. IRA funds to reduce future RMDs, 3) claim my low-earner SS at 64 when he retires, 4) claim his SS at age 70 in 2033, thinking of that as a sort of “annuity” substitute into my golden years (my family has crazy longevity).

    We have seen firsthand the effects of my mother-in-law being left at age 72 with under $180k in cash and $17k annual SS from her husband’s early claiming. I suppose it could be worse, but we’re just hoping this will play out smoothly without need for skilled nursing care, etc.

  41. Hi Fritz,
    Our position in the UK is slightly different. We are not eligible for the state pension (SS equivalent) until 65/66 soon to be 68. The amounts are generally less too. I will get about $8k p.a. husband gets $13k p.a.
    My husband postponed his until 67, then took it rather than waiting until 70. We reviewed our thinking about the difference the investment return would bring. Like you, we did loads of spreadsheets…
    It added a few years to the break even point (aged about 86 as I recall), but as you never know what is round the corner, we decided the money was better in our hand… I’ll take mine as soon as it comes due, which is 4 years away!

  42. If a 62 year old retiree has pre-tax IRA investments with a suitably agressive long-term market mix giving a return of 7%, then taking Social Security early at age 62 potentially means that dollars don’t have to be withdrawn from the IRA, allowing them to grow. While the Social Security benefit starting at age 62 is lower, there’s a time-value-of-money issue at work here, such that all future cash flows need to be discounted to the present in order to do the analysis to see which age at which start taking Social Security benefits produces the highest present value. Such an analysis generally seems to encourage taking Social Security benefits earlier. As noted by others, if means testing is implemented in the future, this also points one in the direction of taking benefits now, rather than after means testing comes into play.

  43. Thanks for the analysis – it’s spot on. Here are two additional factors to consider on when to take Social Security that may justify waiting until 70:
    1. Survivor benefits. The surviving spouse will only receive the higher Social Security benefit. Assuming the historic stereotypes where the husband earns more than the wife and the husband passes away first, the wife will no longer receive her benefit. Not delaying Social Security for the higher earning spouse is not fair or considerate towards the other spouse.
    2. The Social Security tax torpedo. Combining the delay of Social Security with Roth conversions might put you in the 0% tax bracket when you hit 70. If you can do this, then ALL Social Security payments would be tax free. See:

    1. Number 2 is another little discussed argument for delaying SS. Because the formula for taxation is

      AGI + non taxable interest + 1/2 Social Security = combined income

      that means SS can grow twice as fast as other income for the same level of taxation. So maximizing SS can reduce overall taxes, and perhaps dodge some of the torpedo. Which hits at pretty modest income levels, as thresholds weren’t adjusted for inflation. When enacted in 1983 and 1993, those thresholds were indeed “substantial other income”. Today of course, not so much. This is already a type of means testing that will hit ever more households.

  44. Hi, I retired myself at age 49. Just came across your blog, congrats on retiring early. I often wonder if I’ll have enough to last, nothing can be taken for granted. I made the same analysis about when to start taking my social security and in my humble opinion, I think that you are better off enjoying the extra income while you are still relatively young to travel, etc. I’m sorry, but by the time I’m 95 I don’t see a need to have an extra $200k. O.K. maybe for healthcare, and that’s if you make it that far. In my case, I’m single and with no children.

  45. Each person’s situation is different. If you not working or working making less than $17,040 per year at 62 and need the income to survive, then you probably should take it. If you’re still working, making over the $17,040 income limit, then you shouldn’t take it because of penalty. If you’re retired at 62 and have other income to live on comfortably and if taking it affects your taxes, like mine, then you should wait.

    I am retired, will be 62 in October, but will wait until 66 + 2 mths and start taking in Jan 2023. Why, is because I now have $37,000 of qualified dividends in 2018 and will pay 0% tax rate on them. If I started drawing at 62, then next year that would put me over the $77,199 limit and I would have to pay 15% tax rate or $5,100 of additional taxes on those dividends as well as a higher tax rate of 22% on my SS.

    For me, it is better to wait until 66 at least. Then will have to deal with the higher taxes unless can find better non-taxable income stream for investments.

  46. This is a great article, perhaps the best I have read on the subject, but I have a few questions. Maybe I missed it, but I do not think I saw the impact of continuing to pay FICA and Medicare payroll taxes while delaying retirement. Also, GenX and beyond have a “Full Retirement Age” of age 67, so our benefits are already permanently reduced and the difference of delaying is no longer between 62-65, but now is between 62-67. Even waiting to age 70, we will still have a reduced benefit compared to the previous generations. Finally, when I look at the CDC life expectancy tables for males (big difference between men and women, and even between ethnic groups), my life expectancy is 76. If the “break even” is at age 85, I will never break even, not even counting the cost of paying FICA and Medicare taxes from age 62 to 67, or worse, age 70. I currently pay over $6,700 per year in FICA alone. When I calculated my break even, it came out as age 88, which is long after I am expected to die (age 76). Oh, and I don’t know how that 25% cut to SS retirement benefits starting in 2035 will impact the break even point, but I don’t think it will help matters.

    1. Couple things. You didn’t give your actual age, but I’ll say that the older you get the longer the actuarial tables will say you will live (in general). So you might check again in 20 years, and it’ll say you can live to 86, instead of 76. In fact, go back and give your age as 67, and everything else the same, and see what the table says. I bet it will be much closer to 85.

      Second, a “typical” work history is 15-65, or about 50 years of wages. SS only includes the top 30. Your earnings are also indexed for inflation ( The benefits calculation is regressive. Meaning the last dollar you earn, returns much less in SS to you later.

      Sooo…. if you work less than 30 years, you get 0s for those years, and get a reduced SS benefit. But let’s say you only worked a job that only ever kept up with inflation for 45 years. (ie, your wages * index factor was the same for 40 years). Then those last 15 years of wages gained you NO additional benefit. Alternately, you worked a job where your salary was greater than the maximum FICA limit every year, and for 45 year. You also gained NO additional benefit

      That’s why it’s impossible to give a “how will not working affect you” in general. It depends on your situation so much.

  47. I dont think ill enjoy the additional money at 84 instead of the early money. Longevity isnt in my genes and the catchup Isnt going to be feesible for me. It is calculated to pretty much equal out over time.

  48. Thanks for the well-presented thoughts on this topic. How about complicating things further and assume taking the early benefit amount and investing it until actual retirement at age 70? Capture that “time value of $$” thing. Or not. That would add a whole other layer of assumptions and unknowns.

    What I did was split the difference. I retired at age 60, but then delayed receiving my SS benefit until FRA at age 66. We did fine as I have pension income and my wife was still working until I was 65. She will apply for benefits at FRA also. By my estimate, the “crossover” point for FRA compared to 62 vs. 70 is right there in the mid-80’s age. IMO the SSA is well versed in the actuarial estimates and in the macro sense it won’t make any difference when individuals ask for their benefit.

    1. Paul, you are correct that the “opportunity cost” of investing that money from Age 62 is something which should be taken into account. I look at the 7.4% return that I get every year I delay as the “break-even” return I’d need to achieve if I took the SS at Age 62. Just trying to keep it simple. Wink. I do think, from a statistical standpoint, the SSA has the math down, and overall the payout is the same whether you take it early or later. The difference comes if you’re situation isn’t “average”, meaning you live longer than the actuarial tables say you “should”. Longevity risk is my primary reason for delaying SS until Age 70.

  49. I’ll take s.s. @ 70(oct 2019) & will retire spring of 2020. Spouse will collect on mine. She turns 66 in march of 2020. Will her 50% be based on what I would’ve received at my FRA, or what I’ll actually get @ age 70?

    1. My understanding is that the spousal benefit will never be more than your benefit at your FRA. I had been doing calculations in the past thinking it was always half of whatever the primary’s benefit was, then that little fact caught my eye recently. You might double check this, of course.

  50. Since you have retired at 55 doesnt the lack of earned income and paying in social security affect what your actual payout will be?There will be some zeros on some of the years instead of what you were making.The years 62-65 are increased at 5% 66 and 67 is 6.66 % The larger amouns dont occur until youve reaached past 67 to 70 and that is 8 %. Just asking to make sure thats true. I know SS only uses the top 35 years of contributions.

    1. Dwray, yes, it does. I worked 33 years in Corporate America, but I also had some years in college where I worked summer jobs which paid into SS. What I gave up was essentially replacing those low income years with 2 additional high income years had I worked for two more years. To me, it wasn’t worth the cost of giving up two years of Freedom. I’m not sure about the 5% age 62-65, etc., I got my difference by looking at my SS statement for what my payout would be at different ages.

  51. My thinking is that a 25% reduction of a possible $2000 SS payout at FRA leaves you $1500. A 25% percent reduction of a $3000 SS payout at age 70 leaves you with $2250. I rather go with the larger payout. (These are hypothetical payouts for illustration.) Of course, we don’t know if a 25% reduction will be applied across the board. But any reduction of a larger sum will still get you a larger payout compared to a reduction of a smaller sum.
    Also, if I don’t make it to the break even age, I will be dead and won’t care. Since I can afford to, I will wait to age 70 due to the longevity risk (insurance for living long). I don’t want to end up in a assisted-living rat hole when I’m old and decrepit. The larger SS payout will help with that. I’m also too conservative to take a risk in the stock market that will achieve a better return than the 8% increase in the SS payout that I get by waiting til 70.

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