To Draw or Not to Draw (Social Security) - That is the Question

Should you draw social security at 62 or wait until you are 67 or 70? Yes 🤔

In other words - it depends 🤷

I used to think that, if at all possible, one should wait to start drawing, in order to maximize the monthly amount received. Now I’m realizing that it’s truly an individual call.

Social security is set up to pay you the exact same overall amount, regardless of when you start drawing - assuming you live to your predicted age per actuarial tables 📈

A 60 year old non-smoking woman is expected to live to ~ 84 and a similar man to about 81.5. SS payouts are adjusted (they increase about 8%) each year you wait to draw, maxing out at age 70.

If you start drawing SS at 62 vs. 70, your overall payout is the same if you live to your expected age. If you die sooner, than you were better off drawing earlier. If you die later than predicted, you were (probably) better off drawing later, as you’ll receive a larger overall payout.

Why did I say "PROBABLY better off drawing later" if you live longer? Because drawing SS at an earlier age could allow you the financial freedom to do things (like traveling) that you might not be physically able to do when you are older.

Do you need to plan to have savings should you live into your 90’s? Of course - but perhaps you could draw SS earlier and still build in a cushion for a longer than average life expectancy.

If you truly don’t need the SS money to either provide for your basic needs or to live a reasonably enjoyable retirement, than sure - hold off till you max it out.

But don’t assume that just because you held off on SS until you turned 70 that it provides you with any guarantees on how many years you have to physically enjoy the fruits of your retirement.