Many people can plan to take their retirement stipend in their 60’s but if you put it off until you are 70, you receive “delayed credits” insofar that your benefit grows at 8% simple interest over the years that you wait to apply for the monthly check. There are many reasons to not take your Social Security benefit early or even at your full retirement age or FRA as the government refers to it and use these upgrades to your advantage. ALL of them are personal and only can be germaine to you and your life.
One of the first reasons could be you just don’t need the income. what if you continue to work into retirement. My client Joan supervises a team of visiting nurses. She’s phenomenal at it and is very recognized as a star in her field by many. She called the other day and said, ” Hey remember that income idea we talked about the other day? I just got a new job so I don’t need the money now.” Joan is 83. Just got a new job. Seems crazy but she keeps right on rolling and apparently is in demand. She took her benefit at age 70 because she had to. Maybe you’re Joan.
Another reason is perhaps you feel as though you haven’t saved enough for retirement –very common fear right now. If you are 67 yrs old and you will receive $2000 per month if you wait until 70 and get the delayed credits, you can increase your annual amount by $5, 760. Not a huge windfall but every little bit helps. They say 64% of the American public has less than $10k saved for retirement; this could be very tough for a lot of people as their lifestyle would change pretty heavily after the paychecks stop.
If you are one of those people who feel as though you may not have saved enough for retirement, do not despair. Obviously you can’t go back and get a do-over however if you were to get a job at a hospital, college, or a company that has a defined benefit plan also called a pension plan, that would help you immensely. Let’s say you work at one of those places for 5 or 6 years; they would have to pay you something in your retirement. Let’s say it’s $1000 per month– 12K per yr. How much of a lump sum would you have to save to generate that much interest? $250,000 at 5% would do it. Is it easy to save up $250,000? Not hardly right? There is a more likely chance of a pterodactyl landing in the parking lot than you finding one of these. So you really need to be diligent. Coca Cola, Liberty Mutual and others still offer a plan like this one. Usually older companies would still have this benefit. It’s a financial home run to get this if you can.
Thirdly if you have longevity in your immediate family- are you parents still alive? Who do you take after physically? Do you smoke, have steak and eggs for breakfast and a pint of whiskey every night? Maybe your pharmacist knows you by first name? These may be signs that longevity is not in the cards for you. If you are healthy and expect to live into your 80’s then waiting would be a good idea. If you take it early at 62 and if you added up all the payments and you died at age 75-77, you probably picked the right option- meaning you would have collected more if you took it at 66.
If you took it at 66 or FRA, and you die at age 83-84, the aggregate payments would be more even if you had waited to age 70. While your monthly payments would be higher initially at 70, the totals would not be as much if you took it early because of your unfortunate demise at 84.
If you take it at 70 and live past 84-85, then the payments start high and your longevity makes the totals higher than all other options regardless as to how long you’ve been collecting. If you go to the gym a lot, riding your bicycle or walking, eating right, etc maybe waiting is the right idea for you. if you find these numbers/concepts confusing then find a financial professional to break this all down. We have very robust software that enables us to handle all the algebra easily in a very understandable way.
That’s enough for now. I will continue to fill this new year with more Social Security fun for all the gentle readers out there.
Jeff Dragon 
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