When should you claim Social Security? It’s an important question. One study found that retirees have lost $3.4 trillion because the start taking Social Security too early. In this video we’ll look at two strategies. One optimizes Social Security assuming you and your spouse will live long past your life expectancy. The other optimizes the claiming strategy based on life expectancy.
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ABOUT ME
While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I’m the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
I’m also the author of Retire Before Mom and Dad–The Simple Numbers Behind a Lifetime of Financial Freedom (
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I think you might state in your video the cost for Maxifi as it does not seem to be a free tool. Also, it would be nice to see an analysis of filing early say at 63 or 64 and then suspending at 67 (full retirement age) and then restarting at 69 or 70. I haven't seen anyone talk about this as an option to take SS for a few years and then suspend and restart. Please consider it.
Very much appreciate this logical and concise assessment
The crux of the problem is, you have to know what age you will be when you die.
Unless you're planning your suicide, you won't know, until you know, but then you won't even know, because, you know, you won't be around to know.
In those tools can you put in reported inflation versus actual stolen inflation? Government has an incentive to lie about inflation, reporting it lower than actual.
If you’re unhealthy or have a family history of early deaths claim it earlier.
The market's direction can swiftly change, with indexes frequently transitioning from a bear market to a bull market precisely when the news is most negative and investor sentiment reaches its lowest point. I came across an article highlighting individuals who achieved profits of up to $150,000 during challenging market periods. Considering this, I am curious about the best stocks to purchase now or add to a watchlist.
at 65 it pays $1500 /mnth. that's $18,000/yr. If I wait to 70, I forego 5 yrs = $90,000. If I wait to 70 to get $2000 a month= $24,000 / yr that's $6000 more /yr — $90,000/$6000= 15 years to get back the $90,000 I did NOT take… Stupid to wait to take. Get the money as soon as possible. Breaking even at age 85 is not offset by a few percent increase…
I’ve been using Maxifi for 9 years. It’s useful, but ridiculous to get set up. Avoid nominal $ projections. It’s great to compare alternatives, but don’t rely on the numbers it uses. It’s good to estimate tax impacts and social security in the future. But info presentation could use some work. I also have a detailed spreadsheet with accurate calcs. Basically I’m using Maxifi to compare the value of moving to a zero tax state, Roth conversion strategies, but I’ll probably just program my spreadsheet to verify.
If you do the math comparing the extremes 62 vs 70, you have to live to at least 80 to come out ahead by waiting until 70 to take SS.
I will claim at 70. I am still healthy and enjoying working
Life expectancy in u.s. has decreased 2.7 years from 2019 to 2021. Countries with same covid rates decreased by .2 years. We are a sick country. Simple equation. If you live to 82 or higher, you'll come out ahead if you retire at 62.
Am 58 retiring next year but the thought of retirement gives me weakness. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you never imagined to happen. It’s so difficult for people who are retired and have no savings or loved ones to fall back on.
Its free money at 62 1/2. You die before taking any you lose, you die before the breakeven 8yrs you lose. Fed decides yo means test you lose. Take the money early, put it in an annuity. At FRA you can have a joint lifetime benefit that will be more than waiting till FRA. Also your heirs might get something.
My family lives long- so I expect to live to 90. So, just doing the math on Social Security by itself, I should wait until age 70 to take it. However, that only assumes maximizing the Social Security returns. It does not take into account the rest of my retirement plan. If I retire earlier and have to spend down my savings for a few years before I take Social Security, I may actually be worse off at 90. Spending down my savings early in retirement to avoid taking Social Security looks like early sequence of returns losses to my portfolio. Even if the math to maximize Social Security returns says I should wait, it may not be the best idea for my overall plan. Thoughts?
The problem I have with retirement income planning software is that there is no way a retiree can look out 15 years and know their income needs, inflation or market returns. Realistically I can lookout a couple of years with any certainty.
Will I need a new roof, new air conditioning, or large appliances, maybe an expensive car repair/replacement? Inflation at 10% or 2%? Market doubles or gets cut in half?
I can estimate some very basic spending needs a couple years out but that’s it. And I can do that on a 3×5 card.
I see people on YouTube showing their retirement spreadsheets with column after column of dates and figures and I think ‘wonder how long til that blows up.’
This is great information to share. Thanks.
I invested in my health. I'm 66. Stopped drinking soda 10 years ago, low carb diet 4.5 years (194 lbs to 160) and very active fixing up my house and walking 2 hour walk per day where I do my food shopping. Yesterday I carried 20 lbs of food 2.5 miles back home mid afternoon here in Phoenix which imo is a great workout. I've had no health issues yet, still don't need glasses. But my time is coming fast.
I retired at 45 without a pile of cash. Funded retirement by slow flipping my home. Working on house #4. $250k cap gain is excluded from income tax so that helps. That's also kept my income below $15k so I qualified for Medicaid which has saved me about $8-10k/yr. Also a free smartphone with plan (LifeLine) which saves $500/yr and recently free home internet (ACP) saving me about $700/yr.
My total spend has been $600/mo for the past 15 years. Inflation has gone up but there are very few things I buy that have been affected by inflation. Since I walk almost everywhere I only buy about 20 gals of gasoline per year. I turn off the hot water heater in summer and no heating in winter, hang clothes to dry. AC one room. Phoenix is cheap on utilities.
I haven't had a need to take SS yet so I haven't. I don't look at SS as "trying to get the most money I can from the evil government" as I hear from many. Today I could get $2799 but no idea what I would spend it on. I like my simple life. At 70 it would be $3620 plus future COLA. I don't invest other than my house so for me the 8%/yr increase waiting plus COLA is a very sweet deal. There's no other investment where I can get that return.
But if I took SS today at $2799/mo I'd lose my low income benefits. I'd have to pay for Medicare Part B ( $164.90) and lose $0 copay/deductible. Have to pay for a phone ($30-50( and home internet ($60). So my net would be down to $2534. Plus, and this is by far the biggest issue, I absolutely love the stress free nature of dealing with the companies managing my Medicare, smartphone and internet. For some reason these companies provide way better service than when I was the one paying. It's like bizarro world. I assumed it would be worse, but way, way better.
I do have about $5k in expenses coming up to complete my flip and only $14k of cash left, so it's getting close. I may take SS in the next couple months to fund the flip. Than sell in early 2024 and stop SS and repay what I got from the house sale (net $500k). You can do that once, only for the first year. Basically a free loan from SS…another sweet deal.
Then I'll be moving to SE Asia. I'm a single man and will be 67-68 then and dating will be great in SE Asia. Maybe find an attract, trim, young easy to live with wife. Even have kids. I have the funds enough for a wife to live well for the rest of her life and the kids be taken care of through college. If I pass before kids are 18 SS will provide 75% to 180% of my full benefit amount until about 18. The benefit goes to my kids so the mom isn't required to be a US citizen. That's a sweet deal knowing my family would be covered by SS plus my assets.
My prime reason for moving to SE Asia is the adventure. 2nd reason is long term care. Filipinos especially are work famous for their caring. A live-in housekeeper is $100-200/mo USD plus food. A live-in caregiver (Registered nurse or trained caregiver able to lift my weight) is $500-1000/mo USD. Well within my budget. The option to marry a wife who's 20-30 years old will also be a help.(hopefully). Medical care imo will be much better in SE Asia too. Same high level of care as in the US but more importantly to me is the wait to see even a specialist is a day or two while in the US it can be weeks. Medical in the US is great…when you finally get to see a doctor. I'll be dropping Medicare (free now because of no income…which is another reason I'm not wanting to take SS today).
Hi Rob – is there a free version of maxifi? I would like to try this or something like it. The open social security results were wanting me to take retirement now (I'm 62) and my husband wait until 70. Problem. We both still work full time as property managers and plan to continue until we sell our home in the Seattle area in maybe a couple of years. I would love to find another website like maxifi to compare with open social security to see what they say when running our numbers. Also – isn't it true that our numbers would change if we are both still working 2 or maybe 3 more years – or longer?
I'm always surprised at how many people leave money on the table and take SS early. In my opinion, it is simply due to ignorance of how investments work and undue fear that it is going away. I'll be waiting until 70 for me with my wife taking it at 67 since the math clearly shows this will maximize returns with the assumption that at least one of us will live into our 80s.
Too much info. Thank goodness SS income isn't necessary for me.
In Canada it’s much better if you can to wait until min 65 if not 70. Videos on YT for Canadians on this.
For the younger people, if your debt free at or near retirement you have more options at 62 , 67 or 70 when to take out SS. If in Debt then you may need the money asap. No choice but 62. No debt and I mean no consumer debt and no mortgage debt or a very low mortgage payment a better way to approach retirement in my humnle opinion. You at least have the option to wait to FRA or older to start S.S. payments. Some start at 62 and bank the money. I would ask can you beat the 8 % present guarantee the government provides after FRA? Some years yes! 2022 neck no . Some portfolio's dropped 1/3 or more. If your a buy and hold then just a yawn and perhaps bought more on sale. If no sleep and worry and you saw others sell and locked in that loss then perhaps reevaluate and learn more now for your future .
Interesting advice. Things to consider; thanks.