Option 1 or Option 2

Option 1:

Collect SS at 62, dollar cost average into a total market index fund, and enjoy the funds at age 70

Option 2

Delay SS to age 70

Doesn’t option 1 seem like a no brainer if you didn’t need the money until age 70?


Yes, but your payments for life will be substantially reduced w option 1.

With option 2 you can easily calculate how long you must collect benefits to be ahead.

And note option 2 gives you the opportunity to work down IRA balances etc to reduce or avoid costly RMD after age 72.

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Hey @darrellquock -

I’m no expert on this, but I follow a number of boards here, and as I understand it, if you elect to wait until 70, you are pretty much guaranteed an 8% appreciation in benefits. The other option, your option #1 has some risks associated with it, in the event that the market takes a prolonged downturn.

I hope that helps.

If you talk to a financial guy, they have software and can run the numbers for you so that you can see how much you make if you take SS at 62 vs 70 and live until you are 85 or any age. For us, over the total time, the difference seemed pretty small when looked at over 20 or 30 yrs. They can also show you how much your wife makes from SS/spousal benefits until a certain age. Then, they can show you the amount you will have from your pension plan if you take it at 65 or 73 - any age. One doesn’t have to guess anymore. Computers and software are able to help you figure it out. Heck, I wonder if chatgpt is programmed to answer that question already. HTH…doc

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Hi @darrellquock

I can’t give individual investing advice. That said, having written about Social Security for many years for the Fool, I’ve come to an interesting perspective on it: “If you can afford to wait to age 70, then it generally doesn’t matter all that much when you collect. If you can’t afford to wait, then you’ll likely be better served by figuring out a way to be able to delay collecting it until as close to age 70 as you can.”

The key “hard points”, assuming a person is in the “can afford to wait” camp:

  • if you’re still working, wait until at least your full retirement age. Otherwise, the penalties will make it not worthwhile to collect.
  • if your health is such that you won’t make it to at least a “cash flow break even date”, take what you can get when you can get it if you’re single, but do consider the impact on a surviving spouse’s benefit if you’re married.
  • even if you’re still working and don’t need the money, start collecting by age 70, because the benefit doesn’t increase if you wait beyond that age.

As others have pointed out in this thread, there are potentially other factors to consider, including income management to better enable Roth conversions to reduce future RMDs.

And as to your point on investing the benefit amount — there are a few factors to consider on that front:

First, the benefit of waiting is a guaranteed benefit increase vs. the potential of a positive return form investing the benefit.

Second, if you have enough income from other sources to be able to invest your Social Security check, then it is possible that both a big part of that check and any income you generate from your investments from it would be taxed, vs. no tax on the non-existent income from waiting.

Third, Social Security benefits are inflation adjusted, with each adjustment based on applying a rate to whatever your current benefit level is. The higher that check, such as from waiting to collect, the bigger your inflation adjustment will be in absolute dollar terms.

Home Fool


Is that factoring the comparison of reinvesting the money in a total market index fund vs just calculating the cash payment?

One would think that compound interest would create some jet fuel for the account to grow bigger than just delaying…

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Thanks BigFrog,

I have a long way to go before I need to decide. I am currently 44.

But it’s never too early to plan ahead. Right now, I am putting the pieces together to retire at 55.

  1. I am in the camp of not needing SS if it disappeared tomorrow. Luckily, I am on track to have a pension cover 75% of my highest 3 year annual salary, inflation adjusted when I retire. If I decide to retire at 50, the pension will cover 62.5% of my annual salary at age 55.

  2. Thanks to the Motley Fool wisdom and advice, I have been maxing out my retirement accounts at Roth IRA. I also have a Brokerage account full of Motley Fool Stocks.

I am leaning towards collecting as early as possible. Maybe designating the SS bucket of money for Travel Related Funds…

LIke you said, sometimes it is not always about maximizing your money, especially if you don’t need it.

Have you read Bill Perkin’s book “Die With Zero”? If so, I am curious to know your general impressions about it.

HIs focus is maximizing “life enjoyment and memories” and not being afraid to spend down your nest egg while you are alive…

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I don’t think I have read that particular book, but I am familiar with the concept.

My perspective is colored a bit by an exercise I did while studying to potentially take the CFP exam (never did take that test…). In essence, it showed that the spending rate difference between a portfolio designed to last 30 years and one designed to last “forever” really isn’t all that much.

As a result, my goal is to “tier” my retirement money… “need to”, “love to”, and “want to”.

For money to support a core, comfortable lifestyle in retirement (need to), I expect to invest it somewhat traditionally — a stock portfolio feeding a bond ladder designed to cover core living expenses, along with a cash emergency fund.

For money to support the finer things in life (love to), such as big family trips, helping my kids start out their lives on a good foundation, etc., I expect to invest more aggressively, punctuated with preparation withdrawals to very conservative investments once those opportunities are reached.

If I’m doing well on both of those fronts, I’d like to leave a legacy behind (want to), and the two areas I am most passionate about are the Red Cross and financial literacy. I owe a lot to both the Red Cross and to what I learned at the Fool, and I would like to figure out how to leave a lasting impact on one or both fronts.

Net - if I can keep those priorities straight and am reasonably successful with money, I’ll be able to live a comfortable retirement, enjoy the rest of my time on this Earth, and potentially leave the world in a slightly better spot than I found it.

And if the money doesn’t work out as well as I hoped, I’d at least have a good shot of “dying with zero” having led a decent life and not being a huge financial burden on my kids in my later years.

Home Fool


Yes, but you are giving up 8 years of benefits. You have to collect 10 years just to break even. And that does not include investment gains on those funds.

Yes, if you live past 80 you are probably better off to wait. But it does depend on many other aspects including your health and other sources of income.


Sometimes work situations come along, as Telecom began to fold, just before I hit 62, the company made an offer, either a cash lump, or an annuity that added to the pension forever. I grabbed my hat, held out for the annuity, and hit the door. many good years, nearly 40, but it was time, as things slowed, a lot of talented folks also left, leaving the untrained, unskilled, leading to some pressures that became untenable, really… It was time.

Luckily, my DW was still working, a little tight for a while, but in the end, best for all of us, time to travel time for family, it was the best option… No guarantees on your health, so holding on to 70, in my case would have meant tons more road time, living out of a suitcase, it was time to go…


As has been pointed out, there are many factors involved.
One that affected our decisions was the age difference between Neurospouse and myself.
I had the higher SS due to more working years so we let mine ride until she retired early. Then we took mine for the cash flow and supplemented it with hers when she qualified.
At some point, there will be only one of us. If it’s me, I still get my SS amount. If it’s her, she will get topped up to my full retirement age amount. So we were never going to let hers run.
And until she hits RMD age, we are converting IRA money to Roth for her. I am already at RMD age and the combination of SS and RMD seems to leave us with enough cash flow for normal life. We draw down a little extra if we have some major expense (say 50K in our lifestyle).
5 years after her retirement, and a move to a new house, new car and multiple international trips, the balances in IRAs are higher than when she retired.

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I am more convinced than ever that I will be taking SS at the earliest age possible.

Sometimes I need to remind myself that it is okay to be Reasonable vs Rational.

Just like those that pay off their home mortgages off early. They know it may not be the best financial decision, but the piece of mind is priceless. (I still have 11 years left on mine…lol).

Note to self in 18 years from now:

You did enough delaying gratification for most of your adult life…time to indulge in the gratification without any guilt or regret…


Absolutely not.

  1. You are making assumptions about market performance over 8 years - not a very long time to overcome short-term volatility, bad timing, or sequence of returns risk.
  2. You will be taxed on that SS so you can only invest the after-tax portion.
  3. You still need to live on some other, non-employment income. If you are still working, much of that SS will be clawed back.
  4. If you are getting income from other sources, you potentially just made that income subject to more taxes.

I think the raw numbers are actuarily equal. Isn’t that the way they calculate them in the first place?

BUT, I think tax circumstances might be the thing that affect the decision most. If taking Social Security at age 62 will cause more of it to be taxed, perhaps it is worth not taking it and instead taking it later (at age 70?).

The Tax Man will get his share…Whether it is at 62 or 70.

Take the money in hand, spend it, enjoy it, use it while you still have your physical health.

RMD + delayed SS may actually bump some into a higher tax bracket…

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Incorrect; or perhaps, overly simplistic. As many many people here have illustrated over the years, the method by which you chose to spend your investment assets from 62 (or early retirement) through 70 can have a dramatic difference on the amount you have available to spend over the rest of your life, as well as how taxes will impact those income streams.

For example, it can be advisable to access IRA dollars as either income or as Roth conversions prior to RMD age. Of course, if you have turned on SS early, that makes that option potentially have a higher tax liability.

And here you are advocating a COMPLETELY different strategy than take it and invest it. That is an argument that has a heck of a lot more worth (even if I may in general disagree) than take it and invest it.

I am left with the impression that you had your mind made up before you even posted your query and that you were simply looking for validation - and are less willing to consider counter arguments. My wife calls this “thinking out loud.” She will often speak a question for which I am apparently not supposed to answer and if I do answer, I am not supposed to expect her to consider my answer as her question wasn’t really a question - just her way of trying to process her thoughts.

Are you seeking opinions on your query or were you just posting outloud?

If my choices are between paying less taxes by having less income, and paying more taxes because I have more income, I hope I would at least consider the advantages of the second alternative.

Having a nice high income in my old age sounds pretty comforting to me.


Ironically, for people who will “take it and spend it”, the tax issue rarely exists because they usually don’t have substantial assets across taxable and tax-deferred accounts.