Question: Just some food for thought: I am now 66 years old, female, married, and have worked all my life and am still working. I started collecting my own Social Security the month before I turned 66. It will take 14 years to make up that month of money. Personally, I don’t agree that in any circumstance a person should wait until 70 to collect. If you are working at 66 you are still contributing to Social Security and the money you spend to “relax and enjoy your retirement” is for a very short time — maybe 66 to 75, and then a person slows way down.
What good is the money when you’re too old to enjoy any of it? You will use way less money as you age. I don’t think it’s typically in your best interest to collect early if you are in good health, but I think waiting until 70 doesn’t give you those “prime” years of enjoying some good retirement years.
Answer: I disagree, particularly if you have other funds you can use to get by (including spousal, widow’s, divorcee spousal or divorcee widow’s benefits) up until age 70. Here’s why: We can’t count on dying on time. Hence, we need to plan to live not to our expected age of life, but to our maximum age of life. Because we might. Social Security provides longevity insurance — and very inexpensive and reliable longevity insurance at that.
Ideally, if you have other funds that can tide you over, you want to follow the strategy that maximizes your lifetime benefits. This often, but certainly not always, entails waiting until 70 to take your own retirement benefit. Following the optimal strategy and using other funds to finance your spending as needed before 70 means you can have a higher living standard not just after 70, but also before 70. In this case, following the optimal strategy is simply a matter of financial arbitrage. In other words, you can’t lose in terms of your living standard either before or after age 70
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