I Started Taking Social Security at 62. Maybe You Should Too.

When I turned 62, I celebrated by filing the paperwork to start receiving my Social Security benefits.

This goes against the advice offered by the vast majority of professional advisors. Almost universally, financial advisors recommend delaying your benefits for as long as you can.

Yet I have analyzed the numbers and pondered the non-financial aspects of this decision repeatedly over the past several years, and I have always arrived at the same conclusion: Collecting my benefits at age 62 is the best choice for me.

And while everyone’s scenario is different, in most cases if you are no longer working or working and earning less than $16,000 a year, collecting Social Security at 62 is probably your best choice.

I’ll explain my rationale in a moment, but first, here are a few important caveats:

  • I am not a professional financial advisor, and Retire Fabulously! is not a financial planning website. It’s a retirement lifestyle website. And it’s these lifestyle factors that contributed heavily to my decision to begin collecting my benefits sooner rather than later. You should consult a professional financial advisor if you have questions about your specific circumstances.
  • Your situation is unique and different from mine. The decision of when to begin taking Social Security depends upon your personal circumstances. If you are married, your spouse’s age relative to yours and the difference in the amount of benefits you will each receive factor into the equation. There is no one-size-fits-all answer.
  • If you are still working, don’t quit just to begin taking Social Security. As long as working is still sufficiently agreeable for you, keep working. There are many other factors that contribute to the decision of when to stop working that are beyond the scope of this article.

Now, let’s look at the numbers. As you know, the annual statement you receive from Social Security provides you with three numbers: the amount you will receive at age 62, at Full Retirement Age (FRA), and at 70. You can find your estimated benefit amounts at any time on Social Security’s website.

Many financial advisors recommend waiting as long as possible so that you will receive a higher amount each month. They say you should at least wait until Full Retirement Age, and most recommend waiting until 70 if at all possible.

It’s true that you will receive a larger monthly check the longer you wait. Your monthly check will be about 8% less for each year you begin taking your benefits before you reach FRA and, conversely, about 8% larger for each year you defer.

But what they don’t mention is the opportunity cost of the money you aren’t receiving during those years in which you are deferring payments. If your Full Retirement Age is 66 ½ and you begin taking Social Security at 62, you will already have received 54 payments by the time you reach FRA. The break-even point, that is, the point at which the total of all the larger payments you received starting at 66 ½ first exceeds the total of the smaller payments you received starting at 62, is about 80. (The actual break-even point will vary slightly based on a number of factors, such as the Cost of Living Adjustments that will occur each year.)

In other words, if you begin taking Social Security at 62 and you die before reaching 80, you will have received more money from Social Security in total than you would have if you waited until Full Retirement Age. Similarly, if you wait until age 70 to receive an even larger monthly check, it will take around ten years for the total amount of money you receive to catch up.

Even if you live beyond 80, you will still come out ahead if receiving a Social Security check enables you to withdraw less money from your investments over those years.

But there’s more to this decision than just analyzing the numbers. Retirement is not just a math problem. Here are five reasons why you could easily be better off by starting your Social Security payments at 62 or as soon as you stop working.

1. You will probably want to spend more money during your earlier retirement years.

I often say that retirement consists of three phases: your go-go years, your slow-go years, and your no-go years.

During your go-go years, you are still healthy enough to travel and engage in other active pursuits. These are the years in which you want to be able to spend some of your hard-earned and diligently-saved money in order to enjoy life. As you get older, your activity level will decrease. Travel will be more difficult. You’ll probably want to downsize into a smaller house, which will mean lower living expenses.

Your spending needs will probably decrease throughout your retirement years until the last couple years of your life, when your health starts seriously declining and you may need to move into assisted living or a nursing home.

If you wait until 70 to start taking Social Security, you’ll receive a bigger check, but those prime years when you could have enjoyed spending that money will be gone. Also, don’t forget that at 70 ½ you will have to start taking Required Minimum Distributions from your IRA, which will probably result in another increase in cash flow.

2. More money can stay in your IRA and continue to grow.

When you start receiving Social Security benefits, you won’t need to withdraw as much money from your investments. Therefore, more of your money can continue to grow and compound.

Stated the other way, if you delay receiving Social Security, you’ll probably need to draw down more of your investments. I don’t know about you, but I would rather hold onto more of my money than let the government keep it. This leads nicely into the next two reasons:

3. By holding onto more of your savings for longer, you are better prepared for an emergency.

I recently read an article by a so-called “expert” in which he claimed that you should actually spend down your own money before you start taking Social Security, in order to lock in that “guaranteed payment for life” at its highest possible value. This is the WORST. ADVICE. EVER. I pity anyone who has entrusted this guy to manage their life’s savings.

4. By holding onto your savings longer, you will leave a larger inheritance for your spouse or beneficiaries.

Whether you want to spend all of your retirement savings on yourself or leave a big inheritance for your kids is up to you. Believe me, your kids probably want to you enjoy that money yourself.

But that aside, by taking Social Security sooner and leaving more money in your IRA, you’re leaving more money for your beneficiaries if you should die sooner rather than later. Your beneficiaries cannot inherit the social security money you deferred on collecting – the government keeps it.

5. The future of Social Security is uncertain.

I’m not a doomsayer who believes that Social Security will go broke and disappear in some future year. Current estimates predict that Social Security will run out of funds in 2030, but Congress will find ways to trim it here and there to deal with the impending shortfall. Full Retirement Age might get delayed, the maximum age of 70 may be extended, cost of living increases may shrink, and the payout formulas may be tweaked. But something will get done. 

Back in 1984, early in my working career, some of my co-workers believed that Social Security wouldn’t be around by the time we retired. Well, it’s still here. The total demise of Social Security is highly unlikely. It would be political suicide for Congress and future presidents.

I decided that I would rather start taking my money with the current formula. The formula may stay the same or it may get worse, but it’s unlikely to get better.

A friend of mine once joked, “Life is uncertain. Therefore, eat dessert first.”

On a more sobering note, I have friends who are younger than I am who have already died before they could enjoy more than a year or two of their retirement.

While I don’t want to be careless with my investment withdrawals and run out of money, neither do I want to reach 85 and still have most of my money unspent.

I want to enjoy my retirement to the greatest extent possible while I’m still young and healthy enough to do the things I have been looking forward to for years.

Starting my Social Security payments at 62 makes that more achievable.

Again, your situation is unique and different from mine. Your mileage may vary.

But the basic statement that you will receive a larger Social Security check the longer you wait is over-simplified and does not take these other significant lifestyle factors into account.

What are your thoughts? Please feel welcome to comment below.

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© 2019 Dave Hughes. All rights reserved.

Photo credits:
Social Security card and dollar bills: 401kcalculator.org. Some rights reserved.
Open piggy bank and coins: Kevin Schneider
Coin stacks: Nattanan Kanchanaprat


24 Responses

  1. Dave Henning says:

    I didn’t think you were 62!

  2. Marshall Craig says:

    Hi Dave, I decided to wait until at least 68 to file for SS because when I pass my younger wife will receive my SS which will be substantially larger. While we have prepared adequately for retirement, I consider the higher SS for her as an additional safety net when I’m no longer here. I enjoyed the article. And you are correct, the decision is a very personal one.

    • Dave Hughes says:

      Hi Marshall,

      Thanks for your comment. You are correct that when there is an age difference or an income difference between spouses, it may be better for the older or higher-earning spouse to delaying filing for Social Security. There are many variables to consider.


  3. Anthony says:

    This is a great article and it also follows my line of thinking. Looking at it from the angle of a retired Federal employee, one’s retirement is generally based on a “three-legged stool” model. For Federal retirees, the three legs are: 1) Annuity, 2) Social Security Supplement, and Thrift Savings Plan (similar to a 401k). The Supplement is meant as means to help fill the gap between the age of retirement (in my case at age 56) until the age of 62. Therefore, if I decide to not begin Social Security at 62, the Supplement will cease and I will lose an income stream at that time. Thank you for your review of the numbers and reinforcing my decision begin collecting SS at age 62.

    • Dave Hughes says:

      Hi Anthony,

      Thanks for your comment. Interesting… if the Federal government’s Social Security supplement for early retirees is designed to end at 62, they are pretty much telling you to start taking SS at 62.


  4. Ed says:

    I totally agree with taking social security early. Opportunity cost of waiting too long is worth it. I plan to use it as a supplement to my pension, and if I don’t need it, I can invest it. Thanks for the great article.

  5. Wow! So great to hear someone confirm what I’ve been thinking. I’m a widow (currently age 55 in 2019), and I can start taking my husband benefits at 60 — and I absolutely plan to do so! I want to start to really enjoy my life NOW while I CAN enjoy my life.

    • Dave Hughes says:

      Hi Patricia,

      Thanks for your comment. I didn’t know that surviving spouses could start taking their deceased spouse’s benefits at 60. I learned something new!

      That probably means you can take that for a longer number of years and delay taking your own.

      I hope you enjoy life for many years!

      • Yes! We can… as long as we don’t get remarried before age 60.

        At age 60 or older, we are free to remarry, and we will still get the benefits. If we marry beforehand, we lost the benefits. It’s probably the reason why a lot of older folks shack up rather than get married. 😉 They don’t want to lose their benefits.

        And yes, that’s exactly what it means. I can take my late spouse’s benefits first, and hold my own off as long as I’d like. Of course, I can put off taking his as well… but I agree with a lot of your points as to why NOT to do that. Yes, you’ll get more money. But will you get more out of life?

  6. Richard Underwood says:

    Dave, I loved your article! I just retired at 62 the week before Mardi Gras here in New Orleans so I could finally enjoy that great holiday and not stress about work the next day. My decision was based somewhat on my financial situation but also on my medical history ( I have an artificial heart valve from endocarditis from a root canal and history of prostate cancer- 6 years cancer free). I was convinced that work stress was going to kill me (RN at a very busy hospital here in New Orleans). I have always been frugal and loved investing and realized I was a better investor than a nurse. Today I am proud to say I am a member of the 2 comma club. With my SS and withdrawals from my 401K I am bringing home the exact amount I was receiving monthly as a RN. The 401K withdrawals are from my conservative bond investments and would last 15 years at least if they went no where which I doubt. I also have half a million in stocks and ETF’s that I do not plan to touch for at least 10 years (325k in a roth full of quality dividend stocks) Even if we had a downturn in the market which I am expecting I feel my stocks will weather the storm (average recession 18 months but could be longer). Also, have300 k in cash for my house in Mexico, Costa Rica or Panama. I plan on living without a mortgage or rent in retirement. I am not bragging about my situation but I am very proud of the planning and saving I did throughout my life. And that’s with the salary of a RN. Takeaway for me is plan, invest, invest in a ROTH and fully fund your 401K if you can. The sooner you start the better. Since Mardi Gras I have been to Mexico, the beach in Pensacola visiting friends and hanging in New Orleans. I go to the Gym 5 days a week, feel and look good, and this week got a clean bill if health from my Oncologist. Thanks again for the article and keep up the good work!

    • Dave Hughes says:

      Hi Richard,

      I’m glad things have worked out so well for you, and that you have been cancer-free for six years.

      You make a good point that recessions are temporary. Stocks always recover and then grow some more. So many people panic and cash out of their stock during a recession, which is the worst time to do that.

      I’m not sure when you’re planning to move to Mexico, Costa Rica, or Panama, but my upcoming book will have an extensive section on retiring overseas. (Sorry for the shameless tease.) One piece of advice: rent before you buy!

      Thanks for your comments!

  7. Marilyn says:

    Your reasoning echoes ours completely, Dave! And our results, so far, are GOOD! I always was a “dessert first” person – but maybe that’s because I just really like dessert! 🙂 ♥ XO – M

    • Dave Hughes says:

      Hi Marilyn,

      I’m glad it has worked out well for you. Everyone I’ve heard from who started taking SS at 62 has been happy with their decision. I’ve yet to hear from someone who regretted it.

      I really like dessert, too! I’ve never met a calorie I didn’t like. They become good friends who hang around for a long time.


  8. laura says:

    Welcome back! Great article and I totally agree. We will probably be doing the same with our Social Security. We know so many people who keep on working longer to make more money. We are retiring in our 50s this year because our approach is the same as yours. Sure you can make more money working longer, but you are giving up some of the best years of your life! I would add that everyone should consider seeking counsel from a good financial advisor. We were surprised at how comfortable we can live financially after retirement while pursuing our dreams. Many people don’t know about the 72T provision that allows you to withdraw money from your 401k penalty free before age 59-1/2. We will be celebrating our retirement by moving to Hawaii this year and will be farming. https://loko-motives.com/. I always enjoy your articles and am very happy for you. Mahalo! (Thank you)

    • Dave Hughes says:

      Hi Laura,

      Thanks for your comments. I’m happy to see that you are well on your way to making your dream a reality, and you’re doing it now rather than “someday.” Delayed gratification is great, and it’s what motivates us to save for retirement throughout our working years. But at some point, we need to start enjoying that gratification and not keep delaying it forever.

      Best of luck on your new adventure in Hawaii! I will look forward to hearing how that progresses.


  9. Russ says:

    Hi Dave,
    Glad to see you back with another article and that you are enjoying retirement as much as I am. Your article presents a good approach for many, but I like to share a different model. It is not for everyone, but if someone prepares for it ahead of time, it could be a good approach. (Example is for single person)

    Plan for your income after you quit working and prior to age 66.5 or 70 to be as follows:
    Dividends from non IRA accounts $38,000 (Amount of tax free dividends allowed)
    Interest or other taxable income of $12,000 (Amount of standard deduction)
    Withdraw from non IRA savings for what ever else you need for your retirement. For example $10,000 to have a total of $60,000 to spend a year.

    Result: $0 Federal Income Tax
    Able to get low cost Obamacare -savings of several hundred per month
    When you start medicare at age 65, you premium will be at the lowest rate.

    The negatives of this approach: You need to have invested enough over the years to have sufficient investments in stock to have the dividend income and savings to tap into for several years. Also, when RMD (Required Minimum Distributions) start, they will be high because you haven’t touched your IRA savings.

    • Dave Hughes says:

      Hi Russ,

      This is a great strategy for minimizing taxes. Honestly, I don’t think as much about taxes as I probably should. Since retiring, I’m solidly in the 12% bracket, which is much less than I was paying during my working years, so I’m happy with that.

      As you pointed out, this approach assumes that you have enough invested to yield this level of dividends and interest.

      Thanks for your comment!

    • Dan Wick says:

      Capital gains are taxed the same as dividends. You just need a taxable brokerage account with sufficient investments to harvest capital gains.

  10. Petra says:

    Thanks so much for this, Dave. My analysis and sentiments precisely. Glad you wrote this. Refreshing.

  11. Kenny says:

    I think I will be a split-the-difference guy, neither at 62 nor at 70. This is driven mostly because my spouse is 4 years younger than me and has already left the workforce. Her SS payout would not be a large one, and without being morbid, statistically speaking I’m probably going to go before she does. I want her to have access to the maximum spousal benefit she can get, and not have to rely on her SS benefit.

    Knowing this, I’m taking other steps to prepare for a delayed SS…working longer, saving more, setting up an income stream from investments that are not my retirement investments, maximizing health-care savings, and generally just saving more. And being flexible enough to realize these are just plans…life has a way of laughing at plans, and if I need to change my mind, I will. 🙂

    • Dave Hughes says:

      Hi Kenny,

      Your scenario, which involves differences in ages and differences in income, is an excellent example of why my approach isn’t a one-size-fits-all answer for everyone.

      I’m glad you are doing so much to prepare for your retirement!


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