Should You Take Social Security Early & Invest It?

Gil Weinreich noted in an article at Seeking Alpha that the number of people taking Social Security when they are first eligible at 62 has declined sharply. Citing data from the Center for Retirement Research at Boston College, in 1996 56% of men aged 62 claimed Social security compared to 35.6% in 2013.

The decision of when to take Social Security is obviously very important but there are countless approaches on when the best time is and most of them are quite sound. Take it at 62, live off the government’s money while preserving your own. Take it at 62 because you don’t usually start coming out ahead until your late 70’s and there is no guarantee you will live that long. Take it at 70 because the payout is 76% greater than at 62 and 32% greater than at most people’s FRA (full retirement amount). And everything in between.

Spousal benefits open up a whole other jar of complexities. President Obama took away deeming (a spouse takes the lower of his/her own benefit or the spousal benefit at 62 letting the other one grow and then switching). While this reduces the potential maximum that people will get it does make things a little simpler and won’t make any shortfalls in the system worse. My wife doesn’t have her own benefit, her only choice is the spousal benefit. She is six years younger than me so if I wait to take my benefit then she will get more if I die early. This resonates with me.

How can I or anyone say that someone is wrong for wanting to take it at 62 whether it is for either of the two reasons I mentioned above, or any other reason. Neither of the two I mentioned for taking it early resonate with me but they are not on their face, wrong. The point is making informed decisions not making the decision that someone else feels is best. The risk of not living to my late 70’s is low actuarily based on my parents and grandparents. If no male in my family ever made it to 70 I might view that one differently as an example.