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Everyone has heard the advice: Wait until you’re 70 to claim Social Security and you’ll get the biggest possible monthly check. Tim F., a retired health care professional from Arizona. Followed this advice literally.
But now, at 75, he’s having second thoughts. GOBankingRates spoke to Tim to understand why he wishes he had claimed his benefits earlier.
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Their insights may change the way you think about your retirement plans.
The Waiting Game: Not All It’s Cracked Up To Be
Tim thought he was doing everything right.
“Everything you’ve read says you should wait until you’re 70 if you can,” he shared. “I guess I thought, OK, I can, so I should do this. I didn’t stop to think if this was really the best plan for me.”
Tim liked the big monthly checks, but he wasn’t sure they were worth the cost. “Looking back, I needed the extra money when my wife was around.”
no one talks about heartbreak
Before they could claim their benefits together, Tim’s wife Sarah died at the age of 68.
“Sarah and I had plans,” Tim shared. “We were definitely thinking long term when we probably should have been more realistic about how much time we had left.”
Tim isn’t sure what advice this gives other than living today (and making sure to see a doctor regularly).
When your body has other plans
Tim said he didn’t think much about how his health might change as he got older.
“I’m not as active as I was at 30 — hey, even at 40,” he said. “As you get older, a year means potentially a lot of health changes. I wish I had taken the money earlier and used it partly for trips and partly in a high-interest savings account. Hindsight is 20/20!”
The ‘break-even’ point: a moving target
Financial advisors talk about the “break-even point” – that’s the age when the total benefit you get from waiting is greater than the benefit you get from claiming first.
“They told me I’d break even around 82,” Tim said. “But when you’re 75, 82 years seems so far away. I wish I had always thought more about enjoying the present rather than planning for the future.”
Lost investment opportunity
Tim would not have considered the possibility of investing some of his Social Security income if he had claimed earlier.
“I’m not an investing powerhouse,” Tim shared. “But I could put the money in a high-interest savings account and make it work for me. Oh well.”
Hidden Cost: Stress
Perhaps the biggest impact for Tim wasn’t financial at all – it was the stress of waiting.
“In the years before the 70s, I was Always “Second-guessing myself,” he shared. Should we claim now? Are we making a huge mistake? I made myself and everyone around me a little crazy.
Tim’s words of wisdom
Tim doesn’t believe that waiting until age 70 is wrong for everyone, but he has some advice for those trying to make this decision:
- Consider your health. “Be realistic about how you’ll feel in 5 years,” he said.
- Talk to your significant other about it. If it is not taken together then it is not a good decision.
- Think about what you want to do in retirement. travel? Spend time with grandchildren? Start knitting? Make a list and let your finances follow it.
- Look at your other income sources. Side hustles don’t necessarily end with retirement.
Finally, for perspective, here’s what waiting until 70 might look like when it comes to maximum Social Security benefits:
- Currently, the average monthly Social Security check for retired workers is approximately $2,002, according to Social Security Administration (SSA).
- If you retire early at age 62, the maximum monthly benefit is about $2,831.
- When you retire at full retirement age, which is currently between 66 and 67, you will receive a maximum monthly benefit of $4,018.
- If you delay claiming until age 70, the maximum monthly benefit increases to $5,108.
However, keep in mind that the maximum amount is different for everyone based on lifetime earnings and, as Tim said, everyone’s living situation is different.