This Social Security Decision Could Save You $100K
The question of whether to take Social Security when you reach the minimum age or to wait for full benefits is a complicated one. It’s much more than just a financial decision. Most Americans want to get the most money they can yet, it can be tempting to collect it as soon as possible. Your choice could make you forgo thousands of dollars.
Here are the factors that money pros told MoneyLion to consider when making your Social Security decision, and why one path could save you more than $100,000.
Be Savvy: Worried about market swings? See why investors are moving to gold and silver IRAs
See More: FREE 2026 Investor Guide + Up to $25,000 in Silver with Qualifying Purchases
A Big Decision With Alot To Consider
According to Chad Cummings, an attorney and CPA at Cummings & Cummings Law, there is no one-size-fits-all answer.
“Before making a decision as to when to start drawing Social Security, a retiree needs to sit down and model out longevity and other variables,” Cummings said. “Needless to say, if one has a family history of passing away in their late 60s or early 70s, it certainly makes sense to begin drawing sooner.”
How It Adds Up to More Than $100K
For many retirees, though, waiting until age 70 can pay off, producing more than $100,000 of additional lifetime income.
For someone born in 1960 or later, claiming at 62 can reduce the monthly benefit to 70% of the full-retirement amount, while waiting until 70 raises it to 124%, Cummings said. That makes the check at age 70 about 77% larger than the one at age 62.
“So, the $100,000 claim is mathematically plausible,” he said. “If the full-retirement benefit equals $4,000 monthly, claiming at 62 produces about $2,800, while waiting until 70 produces about $4,960. By age 85, that is roughly $773,000 versus $893,000 before future cost-of-living adjustments, a $120,000 difference.”
A Break-Even Point
Cummings said the break-even point matters more than the headline.
“In my example, the retiree forgoes roughly $269,000 between ages 62 and 70,” he said. “The higher benefit catches up around age 80 and four months, before considering investment returns. Poor health or a short life expectancy can reverse the calculation.”
At the same time, according to Taylor Kovar, certified financial planner (CFP) and cofounder of UseKlear.com, it's worth considering whether that larger check would actually keep pace with real costs down the road, since the yearly adjustment on Social Security doesn't always track things like housing and healthcare the way people might expect. That means the size of the check may be just one piece of the bigger picture.
Factors for Married People
“Married couples can face a much larger problem: When the higher-earner delays, delayed-retirement credits can increase the surviving spouse's eventual survivor benefit,” Cummings said. “Claiming early can therefore lock the household into a smaller inflation-adjusted income stream after the first spouse dies.”
“One way to optimize, not maximize," said Marguerita Cheng, CFP, CEO of Blue Ocean Global Wealth, "is to have the spouse partner with the higher income to defer until full retirement age or age 70. The benefit to delaying means higher lifetime income for the individual as well as providing more robust survivor benefits.”
The Bottom Line
“If you can comfortably afford your expenses, protect your retirement savings, stay out of high-interest debt and reasonably wait to claim Social Security, delaying can be incredibly valuable," said Ashley F. Morgan, bankruptcy and debt attorney at Ashley F. Morgan, Law PC. "But retirement planning needs room for real life and some flexibility. The best decision on paper isn’t always the best decision for the person actually living on the money.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion:
