If you’ve spent any time researching Social Security, you’ve probably heard the same advice over and over: delay until 70 to get the largest lifetime benefit. And honestly? As a retirement planning practitioner with nearly 18 years of experience, I’ll admit there are plenty of good reasons to delay until 70.
But here’s the problem with most Social Security claiming strategies: they’re built around one assumption in a silo. That assumption? Maximizing your Social Security benefit should be the primary goal.
But what if that’s the wrong goal?
What if delaying Social Security actually leaves less money to your kids? Will it create more stress in retirement than necessary? What if it forces you to spend down your portfolio more aggressively during a market downturn? And what if you never even live long enough to see the benefit of delaying in the first place?
Today, I want to talk about five scenarios where claiming Social Security earlier—as early as 62—may actually be the better move. Because the right Social Security claiming strategies aren’t about winning a break-even calculation. They’re about making the best decision for your own retirement plans.
For those of you who are new here, my name is Kevin Lao. I own Imagine Financial Security, where we help individuals plan for and execute a successful retirement. If you’re over 50, you’ve saved seven figures or more for retirement, and you’re looking to maximize your retirement income, minimize your lifetime tax bill, and worry less about money, this article is specifically for you.
Why the ‘Delay Until 70’ Social Security Claiming Strategy Is So Popular
Let me start by explaining why this delay-until-70 narrative is so common. If we look at the retirement and survivor benefits life expectancy calculator directly on the Social Security website, the numbers tell an interesting story.
Example
I plugged in a female who’s about to turn 62. According to Social Security, her life expectancy is actually 24 years—meaning they expect her to live until 86. That’s interesting because if you look at life expectancy calculators at birth in 2025 or 2026, it’s about age 79. The reason for this difference? If you make it past 60 or 62, you’re probably pretty healthy. You’re not the normal health profile, so your life expectancy is longer than someone’s life expectancy at birth.
Here’s where the math comes in. If you claim Social Security at 62 years old, you’ll start collecting right away. But if you live until 84, 86, or longer, you’re going to receive significantly lower lifetime benefits. When we look at Social Security in a vacuum, there’s no argument—you’ll receive lower lifetime benefits by claiming early.
You can take your own benefit as early as 62, which results in about a 30% reduction relative to your full retirement age benefit (let’s call it age 67 for most of you). Then, past age 67, you can actually compound your primary insurance amount by another 8% on an annual basis. Those are known as delayed retirement credits.
So you’re giving up a lot of future income to start that check earlier. Even though you didn’t receive those checks for five or eight years by delaying, that higher benefit will increase with inflation. Assuming you hit those life expectancy tables that the Social Security Administration projects, you’re going to receive a much higher lifetime benefit.
That’s the backdrop—the core argument in favor of delaying until 70 or at least until your full retirement age.
Social Security in the Context of Your Retirement Planning
But I don’t think that really illustrates the entire picture. I think we need to look at the Social Security decision in the context of a retirement plan—a full retirement plan.
Now, I may be biased because I do retirement planning for a living, but I really believe that the Social Security lever will be the biggest decision you make for your retirement plan. Some of you may have a pension, but for most of you, you’re going to need your portfolio throughout the duration of your retirement. We need to be smart in coordinating your investment strategy with this very important Social Security lever.
So let’s play contrarian. I’m going to talk about five scenarios where you might consider pausing that “delay until 70” advice and saying, “You know what, let me take a step back and understand what I’m giving up.” Because if you delay, there will be an impact.
My goal is to help you see the 360-degree view of your retirement planning and ultimately make the best Social Security decision for you. But here’s the reality: claiming the best Social Security decision involves getting out your crystal ball and saying, “This is exactly how long I’m going to live, this is exactly how the portfolio is going to perform, and this is exactly what inflation is going to look like.”
In other words, it’s impossible. Whatever decision you make, you need to make it based on the facts and circumstances you find yourself in. Just know it’s probably wrong because we don’t have a crystal ball.
Scenario 1: When Longevity Isn’t on Your Side for Claiming Social Security
Let’s start with some low-hanging fruit, though I’m also going to add a different angle at the end of this one.
What if longevity is not on your side? The Social Security life expectancy calculator says 84, but what if both of your parents passed away in their 60s or 70s? Or maybe you’ve unfortunately received a diagnosis that doesn’t align with the longevity the Social Security Administration projects. These would be obvious reasons to strongly consider taking Social Security as early as possible.
But even if you’re healthy—even if you’re perfectly healthy and have good genes and the longevity gene pool in your family—I’ve personally worked with people who paid into Social Security for 30-plus years and passed away before even receiving their first check. It sounds depressing, and it’s difficult to think about, but the reality is that tomorrow isn’t guaranteed.
I think a lot of financial planning and a lot of advisors (myself included—I’m guilty of this) just assume longevity for everyone without looking at the other side of the coin. Sometimes, a bird in the hand really is worth two in the bush.
Scenario 2: Preserving Your Portfolio and Social Security Benefits for Your Heirs
Here’s another critical point that rarely shows up in break-even calculators: you can’t leave your Social Security check to your heirs, to your children. Social Security stops when you stop.
- Many of you care deeply about leaving a legacy.
- You didn’t come from much and worked hard to build up seven figures or multiple seven figures.
- It’s important to you to set your kids and grandkids up for success in the future.
Delaying Social Security often means a much higher portfolio withdrawal rate in those early years while you’re waiting for that larger Social Security check. Larger withdrawals put pressure on your portfolio. Remember, your investment accounts can be passed on to the next generation.
Yes, your future Social Security benefits may be larger by delaying until 67 or 70, but it could absolutely impact your portfolio balance and ultimately the legacy you plan on leaving the next generation. We can’t just look at Social Security claiming in a silo and say, “the largest possible benefit is at age 70, done.” We need to look at the impact on your investment portfolio.
This is largely dependent on the size of your portfolio. If you have a large portfolio size relative to your cash flow needs, you may consider delaying your Social Security benefit because it won’t put much pressure on your portfolio. But if your starting withdrawal rate from delaying Social Security is 7%, 8%, or 9%, there’s a lot of risk.
Think about it this way: every dollar you pull from your portfolio while waiting for Social Security to start is a dollar that can’t compound for your heirs. Every dollar you pull during a market downturn is potentially selling investments at a loss.
When is the Best Time to Claim Social Security benefits if Legacy Planning Matters to You?
It might be earlier than you think, especially if it means preserving your investment accounts for the next generation.
Your Social Security benefits provide guaranteed income for your lifetime, but they don’t transfer to your children. Your IRA, your brokerage accounts, your real estate—those can create generational wealth. Sometimes the math that makes sense isn’t just about maximizing your personal lifetime Social Security benefit. It’s about maximizing what you leave behind.
Scenario 3: Social Security Optimization Through Spousal Planning
Some of you are single, so bear with me here. If you’re married, this will be important.
It’s often the case that two benefits are going to be very different. One spouse may have a much larger benefit than the other, or even a slightly larger one. Well, the spouse with the smaller benefit may find it valuable to claim Social Security at age 62.
Start that income stream right away, put less pressure on the portfolio withdrawal during that bridge period, and then delay the larger benefit—maybe until full retirement age, maybe until age 70. That way, you maximize that survivor benefit.
Remember, when one spouse passes, the surviving spouse does not keep both Social Security checks. They step up to the larger of the two benefits. By delaying the larger of the two benefits, you’re maximizing that survivor benefit while collecting some Social Security income from the lower-earning spouse during that bridge period.
Planning Tip
One of the most important tips for maximizing Social Security benefits is understanding that if you’re married, this needs to be a spousal planning decision. It shouldn’t be spouse A looking at their Social Security benefit and spouse B looking at theirs separately. You need to look at it in the context of a joint retirement plan.
It’s often about not only maximizing your income but also maximizing the joint life income for both individuals.
Just be aware: if the lower-earning spouse does claim early, any future spousal benefits they may be entitled to will also be reduced. So if that’s something you want to consider, the lower-earning spouse could potentially delay up until full retirement age to collect that maximum spousal benefit while both spouses are alive. Then, when one spouse passes, the surviving spouse steps up to the larger of those two benefits.
Scenario 4: Maximizing Your Go-Go Years in Retirement Planning
I’m going to throw this one out there because I feel like this may be one of the most important scenarios. This is about truly enjoying your go-go years without stressing out about the markets.
In theory, retirement could last 30 or 40 years. But let’s be real. How many of those years are you truly able to do the things you retired for?
I often see retirement broken down into three distinct phases:
- The go-go years
- The slow-go years
- The no-go years
The go-go years are what got you excited to retire and fire your boss in the first place. You want to travel the world, go on epic golf trips, and spend time with your grandkids while you’re healthy and physically and mentally there. Do new experiences, take up new hobbies.
After nearly 18 years doing this and working with retirees, I’ve watched transitions from the go-go to the slow-go to the no-go. Sometimes those transitions happen gradually—you can see them happening and talk about them. Sometimes they happen overnight.
This is the tough reality: retirement could be 30 to 40 years, but that first 10 to 15 years may be your best years.
Permission to Spend
Here’s what I’ve observed: sometimes when you go from saver to spender, it’s difficult to transition. Delaying Social Security may not just be a math problem but a behavioral finance problem.
I’ve seen this where someone’s retired and saved more than enough. But then every time there’s a market downturn, they’re afraid to spend. They’re afraid to take that epic trip or that golf trip. They want to protect their portfolio and wait until the market recovers. It’s stressful for them, and honestly, I’m stressed out for them.
I think flipping that switch is difficult. Some retirees just need some kind of guaranteed income in that early phase of retirement during their go-go years. It gives them permission to spend.
This is a big reason why clients have admitted to hiring me. They’ve been successful DIYers for years, even decades. They tell me, “Kevin, I need permission to spend. Tell me how much I can spend. What do I have the capacity to spend?”
How the Social Security Benefit Can Help
That Social Security benefit could provide that permission to spend, especially if there’s no pension coming in, especially if there’s no annuity income. It reduces anxiety and gives you permission to take that trip.
Ironically, it could actually help preserve that portfolio balance because you’re not constantly worrying about what the market’s doing and making bad decisions on your investment portfolio just because you’re living solely on that for your retirement income while waiting to claim Social Security until 67 or 70.
If you’re the type of individual who may constantly worry about every market headline or have difficulty taking income out of your investment portfolio, pulling the trigger on early Social Security could really alleviate some of that anxiety and give you permission to spend.
No one has a crystal ball to know how long health is going to be on your side. I have clients well into their 70s and 80s who are still going strong. I have clients in their late 60s who are slow-going right now.
Scenario 5: Using Social Security Claiming Age Strategies to Protect Against Market Downturns
Maybe you’ve read through the first four points, and you’re thinking, “Kevin, this all makes sense, but I’m still comfortable. I’m ready financially and behaviorally to delay my Social Security benefit for all the good reasons—protect against longevity, receive the maximum survivor benefit, protect against inflation.”
The question I want to propose is this:
What if you retire into a bear market?
What if you retire into a market like 2008 or the early 2000s, during the dot-com bubble? Portfolios can drop 30% or 50% very quickly, even if you’re well diversified. That may not be the ideal time to aggressively spend down your portfolio and withdraw from your investments.
We’ve all heard the saying: buy low and sell high. If you’re solely relying on your portfolio for income and you retire into one of those dreaded sequence of returns risk environments, spending heavily from your portfolio probably means selling investments in a downturn—selling low.
This is where learning how to optimize Social Security claiming becomes critical. Social Security can simply become a lever, a backup plan.
Maybe your original plan is to delay until 70, but you plan to retire at 60, so you’ve got a 10-year bridge until Social Security. You’ve saved diligently. You’re okay. But let’s say you get unlucky and retire into a downturn.
You could potentially pull the lever and claim Social Security earlier than you anticipated. No one says you have to put a stake in the ground and claim it exactly when you say it up front. You can claim at any time after 62.
Starting your Social Security benefit in a downturn could put less pressure on your investment portfolio and allow the market to recover—because markets always do. Bear markets, on average, last about a year, though they can last longer (as we saw in 2008, which lasted about five years).
One-Time Stop Option
Here’s another opportunity: there’s a one-time option to stop payments. If you do claim Social Security well before your full retirement age and the market recovers, you can stop your Social Security benefits at your full retirement age and then collect those delayed retirement credits up until age 70.
In other words, it doesn’t have to be a permanent decision. You could claim Social Security at 62. Then you stop your Social Security benefit at full retirement age and get those delayed retirement credits later on.
Understanding Social Security Benefits Timing: The Break-Even Myth
If there’s one overall takeaway I hope you got from this article, it’s that Social Security claiming is a lot more than a break-even calculation in a silo.
- Longevity matters
- Legacy goals matter
- Your spousal planning scenario matters
- Your personality traits matter
- Your retirement lifestyle matters
- Health matters
The reality is that two individuals with literally the same Social Security benefit could choose different Social Security claiming strategies, and they could both be right.
That’s exactly why these decisions need to be coordinated in the context of your overall retirement plan.
Remember, the best Social Security claiming strategies aren’t about blindly following conventional wisdom. They’re about understanding your unique situation and making the decision that’s right for your retirement, your family, and your goals.
Interested in working with me one-on-one? You can start by taking our Retirement Readiness Questionnaire on our website at www.imaginefinancialsecurity.com, so we can learn more about how we can help you on your journey to and through retirement.
Not quite ready to take the questionnaire, but want helpful tips and resources? Sign up for our monthly newsletter and/or subscribe to our YouTube channel.
This is for general education purposes only and should not be considered as tax, legal, or investment advice.
