Let’s unpack the numbers, real-life scenarios, and planning considerations to help you make a smarter decision.

The 8% Delay Boost: Not Always a Clear Win
Yes, Social Security benefits increase by 8% per year for each year you delay past full retirement age. But there’s a catch—those extra dollars come at the cost of time. You’re collecting fewer checks over your lifetime. Plus, the logic of delaying assumes you’ll draw more heavily from your portfolio to cover expenses while waiting, potentially impacting long-term growth.

If you delay until 67, the break-even point—the age where your total benefits surpass what you would have received starting at 62—is around 76. For those who wait until 70, the break-even is closer to 80.

Case Study: Tina’s Retirement Puzzle
Let’s look at Tina. She retires at age 62 with $1 million in investments and plans to spend $6,000 per month. If she waits to collect Social Security until age 70, her monthly benefit rises from $3,000 to $3,700. Sounds great, right?

But delaying means Tina has to draw down her portfolio more heavily between ages 62 and 70. If her investments earn a healthy 7% return, this early withdrawal dents her portfolio’s growth potential. In fact, under these conditions, Tina ends up with a higher net worth up to age 85 if she starts collecting at 62—despite the lower benefit amount. Why? Because she preserved her investments, which continued compounding.

Investment Return Rates Change the Game
The higher your investment returns, the stronger the case for collecting Social Security early. If your portfolio earns 9% per year, it makes more sense to use Social Security to avoid pulling from your high-performing investments.

But if your portfolio is more conservative—say it earns 5% per year—then delaying becomes more attractive. That future higher benefit becomes a more valuable piece of your retirement income puzzle, especially if you expect a long life.

Why Break-Even Analysis Falls Short
Most Social Security calculators look only at total benefit amounts, ignoring second-order effects like opportunity cost, tax strategy, and portfolio depletion.

Here’s a key insight: taking Social Security early means less pressure on your investments. That can preserve your balance and allow more of your money to grow—and generate income over time. For many, that creates a bigger impact than the extra 8% benefit you’d get from delaying.

It’s Not Just About You—Spousal and Tax Considerations Matter
If you’re married, spousal benefits, survivor benefits, and coordinated claiming strategies must be factored in. And if you’re considering Roth conversions, the timing of Social Security can influence your tax bracket and Medicare premiums.

A few key strategies:

• Use the delay window (62–70) to convert pre-tax dollars to Roth IRAs at lower rates
• Weigh the tax impact of portfolio withdrawals during delay years
• Consider if a higher benefit helps a lower-earning spouse later in life

So… When Should You Claim?
There’s no one-size-fits-all answer. The best Social Security strategy is personalized. It depends on:

• Your investment performance
• Your retirement spending needs
• Your health and life expectancy
• Your tax situation
• Your spouse’s benefit eligibility

Working with a financial advisor who can model your portfolio under different Social Security start dates is critical. Only then can you see the full picture—not just the break-even age, but the impact on your long-term wealth.

The Bottom Line
Delaying Social Security isn’t always the smart play. It might sound great in theory—but when you factor in investment performance, taxes, and opportunity cost, claiming early could lead to better outcomes.

The only way to know? Run the numbers. Consider your portfolio growth, simulate different start dates, and build a plan that aligns with your goals—not just the government’s actuarial tables.

You should always consult a financial, tax, or legal professional familiar about your unique circumstances before making any financial decisions. This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns.Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost

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