Should You Collect Social Security Earlier for a “Happier Retirement?”

For years, Social Security experts were suggesting that seniors wait as long as they could to collect their Social Security benefits. But the tide is turning, and now, some experts are saying to go ahead and collect your benefits earlier, rather than waiting.

The full retirement age is going through a slow change. However, the range when you can claim Social Security will remain the same for the foreseeable future: from as early as 62 to as late as 70. For many, it clearly makes sense to wait until your 70th birthday to claim benefits for maximum payouts. But many Americans are claiming Social Security early, with 38% of men and 44% of women filing for benefits as soon as they become eligible.

The “Leisure in Retirement: Beyond the Bucket List” Study

Recently, Merrill Lynch and Age Wave launched the “Leisure in Retirement: Beyond the Bucket List” study to understand the priorities, experiences, and challenges of leisure in retirement, and the topic of when to collect Social Security was addressed. According to study results, the best reason to claim Social Security early is because even if the payout is less, you can use the money earlier to make your day-to-day experience of retired life happier. This study is based on a nationally representative survey of more than 3,700 respondents, nationally representative of age, gender, ethnicity, income, and geography.

Unless you’re truly in love with your job, there’s something that the added income of Social Security can buy you that nothing else can: free time. If you have extra income from working, you can buy things like a nice car, vacations, fancy gadgets etc. This is called material affluence. What many of us don’t consider is time affluence, or the time we spend enjoying our retirement. Knowing that the added income of Social Security can give you the freedom you need to live your golden years the way you want, it’s important to maximize these years, and sometimes that means taking less money, but taking it a lot sooner.

Taking Social Security Administration Mortality Rates into Account

According to the Social Security Administration, a 62-year-old man has on average another 20 years to live, while a 62-year-old woman has 23 years. If you waited until you were 70 to collect Social Security, as a man you would have on average, 10 more years, and as a female, 13 more years (Remember, this is an average. A lot of us are living much longer!) Taking these numbers into account, do you want to enjoy less extra income ten years sooner, or wait to get more ten years later?

Why Retirees Are Taking Social Security Earlier

Retirees who collect Social Security earlier are using the extra income to enjoy more freedom, more fun, new beginnings, and greater emotional wellbeing than at any other point in their lives. According to the Merrill Lynch/Age Wave survey:

  • Greater freedom: 92% of retirees say retirement gives them greater freedom and flexibility to do whatever they want—regardless of how much money they have. Between ages 61-75, retirees reach the “freedom zone,” where they enjoy the greatest balance of health, free time, fun, and emotional wellbeing.
  • More fun: Despite popular media portrayals of fun as primarily the domain of youth, it turns out that the experience of fun rises in midlife and peaks in retirement.
  • Greater emotional wellbeing: Lifetime emotional wellbeing peaks in retirement. Feelings of happiness, contentment, and relaxation soar, while anxiety seems to plummet.
  • More experiences rather than things: Most retirees (95%) say they would prefer to have more enjoyable experiences rather than buy more things. Retirees enjoy two types of leisure: “everyday leisure,” where most seek to de-stress and improve their health and “special occasion leisure,” where retirees seek unique or rare peak experiences that give them lasting memories. 81% of retirees say they want a retirement filled with many peak experiences.
  • More time with family and friends: Retirees tell us who they spend time with (61%) is far more important than what they do (39%), and that’s even more true for women than men.

Why Some People Wait

For those who can afford to wait — and that would include anyone with retirement accounts that can be drawn down, penalty-free — claiming social security early will cost you, on average, thousands of dollars a year. By waiting to collect benefits until age 70, you are in effect buying extra insurance — insurance against what is perhaps the greatest danger of retirement: outliving your savings.

Here are some things you should know:

  • Depending on your age, you may choose to take your Social Security benefits at age 62, but doing so may result in a reduction of as much as 30% of your benefits, according to the Social Security Administration (SSA).
  • For early retirees, the SSA reduces a retirement benefit by 5/9 of 1 percent for each month before normal (or full) retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced by 5/12 of 1 percent per month.
  • The Social Security Administration also imposes limits on income for early retirees. For instance, if early retirees earned more than $16,920 in 2017, their Social Security benefits would be reduced by $1 for every $2 they earn above the limit.
  • Each year you wait past full retirement age to claim Social Security benefits up to age 70, you earn an 8 percent delayed retirement credit that will increase your Social Security benefits in addition to cost of living adjustments.

Be Sure to Educate Yourself About Social Security

Social Security rules and strategies are very complex. Before making any decisions, be sure to educate yourself. Below are tools related to Social Security and retirement planning, that can provide more details:

Specialized Long-Term Care Financial Planning

Whether you collect Social Security earlier or later, it is important to plan in advance to live comfortably, and to deal effectively with challenges as they arise. For 30 years, my law firm and I have been providing you and our other clients with caring and compassionate legal services designed to ensure that your wishes will be carried out when you die, and that your assets are protected from the catastrophic expenses of long-term care. What many clients don’t realize is that we also do specialized financial planning to help clients pay for long-term care, because the legal strategies we use for asset protection are not right for everyone, and many clients benefit from a combination of legal and financial long-term care asset protection strategies. If you haven’t yet done your own long-term care planning, or think you current long-term care plan may not be fully adequate, come see me for an initial consultation.

Fairfax Retirement Planning: 703-691-1888

Fredericksburg Retirement Planning: 540-479-1435

Rockville Retirement Planning: 301-519-8041

DC Retirement Planning: 202-587-2797


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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.

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