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He Claimed Social Security at 62 Against His Advisor's Advice. At 78, His $900,000 Portfolio Says It Was the Right Call.
24/7 Wall St. • • business
Key Points:
- The traditional advice to delay Social Security claiming until age 70 maximizes monthly benefits but primarily suits retirees relying solely on Social Security as their income floor.
- Claiming early at 62 reduces monthly benefits by about 30%, but for retirees with substantial investment portfolios, early claiming can preserve portfolio growth and inheritance potential since fewer withdrawals are needed.
- The breakeven age for delayed claiming benefits is typically in the early-to-mid 80s, making early claiming more advantageous for those with shorter life expectancy or significant assets.
- Early claiming also mitigates sequence-of-returns risk by providing guaranteed income during market downturns, reducing the need to sell investments at depressed prices.
- Individual factors such as portfolio size, health, and marital status should guide Social Security claiming decisions rather than relying on generic rules, as different circumstances warrant different strategies.
