The $3.4 Trillion lost by claiming SS at age 62 I’ve been quoting was from a 2019 study. The Univ. of Chicago published a new study in 2023 showing that, based on their age at death, 90% of SS recipients would have collected more from the system by waiting (if not until until age 70, at least as long as they can.) That’s far worse than I thought. I knew that Americans were bad at estimating their longevity, but I didn’t realize it was epidemic. {{ LOL }}
Of course, only the Top 10% or 15% of the population have enough in savings to comfortably delay all the way to 70, but a much smaller percentage do so.
It’s really even worse than we think. A substantial percentage begin taking social security WHILE they are still working. They end up getting less for the rest of their lives AND they suffer whatever tax penalty may occur while still working and collecting SS at the same time. Basically they want/need to spend it all as soon as possible.
According to the article many people who take at 62 while still working are low wage earners with a poor earnings history who are struggling to make ends meet. And according to intercst’s numbers, they have a much lower average lifespan than wealthier, better educated taxpayers. They may be financially illiterate, but they also may have little choice in the matter.
Another segment of that group has back problems. With physical jobs or even sitting for longer periods, back problems are the number one work-related problem. For that group at age 62, enough is enough.
I am currently standing at a desk converter. I can stand here for the next twelve hours, no problem; I do not have back problems.
Absolutely! If you need your SS benefit to make ends meet, you take it at age 62.
My comments are addressed to those with enough in savings to have a choice to delay. Even if you only have enough in savings to wait until age 62-1/2, that’s to your benefit.
For people with a lower life expectancy, it makes sense to take social security as early as possible. So this isn’t a particularly good example of financial innumeracy.
Exactly. I have learned a lot from intercst, but there are many reasons people take early that are reasonable given their personal circumstances. Sorry I worded it so poorly.
Well, I took my SS while I was still working and at Full Retirement Age; so no decrease in my benefit and I paid no extra taxes on anything. I took the money and invested it. Don’t regret a thing. But thanks for commenting!