When Should You Take Social Security?

When people ask, “When should I take Social Security?” they usually want a definitive answer.

They want to know what’s best, objectively.

Asking, “What’s the optimal claiming age?” is like asking, “What’s the best car?”

Best for whom?

The best car for you might be a Subaru Outback. Your neighbor might prefer a Toyota Tacoma. Both are excellent vehicles, but they solve different problems.

The Social Security system is built around actuarial tables that reflect the entire population. On average, you shouldn’t expect to outsmart them. They take into account all the possible outcomes ranging from early death in a plane crash to living to 110.

The better question for Social Security is: “What works best for your life?”

• Is it more important to maximize guaranteed income and protect against longevity?

• Or are you more concerned about drawing down your portfolio too quickly in your 60s? 

• Is there an urgent cash-flow or liquidity need?

• Do you prefer more flexibility early on, or greater stability later in life? 

• How important is protecting a surviving spouse?

Ignoring the more extreme outcomes, such as dying at 68 or living to 100, the math between claiming at 67 and 70 is often surprisingly close. What tips the decision usually isn’t a spreadsheet projection, but personal preference. 

Some people sleep better knowing they’ve locked in the highest inflation-adjusted income for life. Others prefer keeping more assets accessible sooner, even if the guaranteed check is smaller.

Regret usually doesn’t come from the decision itself, like claiming at 67 instead of 70. 

Instead it comes from acting impulsively, or letting fear dictate your decision. It can especially come from copying someone else whose temperament, preferences, health, and financial situation are different from your own.

Pundits on TV or YouTube will tend to argue as if there is a single right answer that works for everyone. In my experience, that just isn’t the case. Such conclusions tend to lean heavily on unknowable variables, as if a specific outcome is a foregone conclusion. 

But people usually make better decisions when they focus on what is knowable about their own situation, and how they want to structure risk in retirement. 

The goal isn’t to “outguess the system.” 

The goal is to make a decision that aligns with your opportunities, your needs, and your risks.

That’s a much more useful conversation.