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When to Take Social Security Benefits

When to Take Social Security Benefits

Claiming Social Security benefits at age 62 is a huge mistake. Do not take Social Security at age 62.

Now, a lot of people are in a position where their backs are against the wall, and they’re forced to take it. That’s not good because if you take Social Security at age 62, your benefits will be tiny. If you can wait until you’re 66–67 (age 70 would be even better), the benefits will be greater and last longer.

Like I said, though, a lot of people are in a position that requires them to take benefits at age 62 because they mismanage their financial affairs. Don’t be one of those people.

Remember, the goal is to not be an idiot with your money and to minimize your financial stress. I talk about it all the time here in the Jared Dillian Letter and on my Be Smart podcast—and I go into even greater detail on the actionable steps you can take to live a stress-free financial life in my upcoming book, No Worries.

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What If You Want to Retire Early?

There are also a lot of people who get to 62 and just want to retire because they’re sick of working. I don’t really understand that either. I’m 49, and you’re telling me I can retire in 13 years? That’s nuts. I have so much more stuff I want to do. I’m not going to retire in 13 years. That’s madness.

But yes, you can retire at age 62. That said, a lot of people haven’t saved enough money to last until they’ve reached age 70. Seventy is the magic number—that’s when you get the big, fat Social Security benefits.

If you want to stop working because you hate working, I don’t really sympathize. Why don’t you like working? What I’ve found is that people who are unhappy working are usually also unhappy not working. They’re just unhappy people.

A lot of people think, “When I retire, I’m moving to the beach” or “I’m going to travel nonstop” or “I’m going to visit the grandkids” or whatever. They think about all this stuff, and what ends up happening is they just sit at home with Fox News turned all the way up. That’s all they do. I see this repeatedly.

Look, if you’re unhappy in your job, you’re likely going to be unhappy without a job. Also, if you don’t like your job, find another job. A lot of people like to sit in pain, tell everybody they hate their job, and then they don’t do anything to get another one. They just want to complain about it. If you hate your job, the problem might not be the job.

Wait Until You’re 70

Anyway, I got a little off topic. The point is that people who take Social Security at age 62 are getting half the benefits they would get at age 70. Half.

You’re not exactly going to be living in poverty, but it’s pretty close unless you have money saved up. On the other hand, if you’re at age 70, you can get a pretty good check from the government.

One more thing…

People are so pessimistic about how long they’re going to live. Everybody thinks they’re going to die young, and then they live well into their 80s and beyond.

The one time it might make sense to take benefits at age 62 is when you’re doing manual labor, your body just cannot keep up with it anymore, and you don’t have a significant amount of retirement savings.

There are a lot of people like that who are forced into Social Security at an early age. You don’t want to be in that position. So, take Social Security benefits at age 70. You’ll be better off.

Jared Dillian
Jared Dillian, MFA

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