I recently read a couple articles that have talked about rethinking delaying Social Security (one that is more nerdy, and one that shares a retiree’s experience), and I’ll admit, they got me thinking!

To be fair, I don’t believe there’s a universal right answer (and frankly, neither should you), but we often hear the benefits of delaying, specifically to 70.

We’ve also shared why we believe delaying benefits make sense for numerous retirees – and I stand by my thoughts that I share.

But what about the counterargument?

While the purpose of this article is to provide counterarguments to delaying Social Security, my takeaway is that you can do 3 things:

Justify your decision both personally and financially
Sleep at night knowing your decision is sound
Do everything possible to avoid regret

While I cannot say I spend my time reading the obituary sections regularly, I can confidently say I’ve never read one that talks about someone’s Social Security choice. The decision, therefore, shouldn’t be solely about maximizing benefits, but rather, maximizing your retirement utility.

Understanding Your Social Security Benefit Foundation

Before examining when to claim benefits, understanding how your benefit is calculated provides crucial context for your decision.

The Social Security Administration calculates your benefit based on your highest 35 years of earnings, adjusted for wage inflation. If you’ve worked fewer than 35 years, zeros are averaged in, reducing your benefit. These earnings determine your Average Indexed Monthly Earnings (AIME), which calculates your Primary Insurance Amount (PIA)—the benefit you receive at your Full Retirement Age.

The Age Factor: How Timing Changes Everything

2025 Maximum Monthly Benefits:

Age 62 (Early Claiming): $2,831 per month
Age 67 (Full Retirement Age): $4,018 per month
Age 70 (Maximum Delay): $5,108 per month

The difference between claiming at 62 versus 70 represents more than $2,200 monthly or over $27,000 annually. This substantial gap drives many advisors to recommend delaying, but this advice alone rests on incomplete analysis.

The Analysis: What To Focus On (And Rightfully So)

Longevity and the Breakeven Point

The breakeven analysis dominates the Social Security choice of many. This calculation identifies when the cumulative benefits from delaying surpass the cumulative benefits from claiming early—typically occurring in the late 70s or early 80s.

The logic is straightforward: if you expect to live past your breakeven point, delaying maximizes lifetime benefits. Given increasing life expectancy, this mathematical reality leads many advisors to treat delaying until 70 as near-universal wisdom.

Policy Risk and Trust Fund Solvency

The Social Security trust fund faces genuine challenges. Current projections suggest depletion by 2033, after which the system could only pay approximately 79% of scheduled benefits without legislative changes. This uncertainty provides rational justification for claiming earlier—receiving benefits now rather than risking reduced payments later.

Tax Optimization Opportunities

Social Security offers tax advantages that many analyses overlook. Depending on your total income, between 15% and 100% of your benefits may be tax-free. Compare this to traditional retirement account withdrawals, which are fully taxable as ordinary income.

This tax treatment creates a strategic opportunity: claiming Social Security earlier while allowing tax-deferred accounts to continue compounding could produce better after-tax results than the reverse strategy.

This also could include a retirees “gap years” – when income remains at its lowest. During this time, Roth Conversion planning & Capital Gains Harvesting planning could be most beneficial.

Estate and Beneficiary Considerations

Unlike retirement accounts that pass to designated beneficiaries, Social Security benefits typically only transfer to spouses. If leaving money to children or other beneficiaries is important, spending Social Security income first while preserving investment accounts for heirs might align better with your estate planning goals.

However, delaying your claim can provide your spouse with a higher survivor benefit, an important consideration for married couples where one spouse significantly out-earns the other.

Beyond the Spreadsheet: Advanced Risks of Delaying

Traditional analysis treats dollars as fungible—a dollar at 65 equals a dollar at 85. But this assumption ignores crucial aspects of retirement reality.

Expected Utility vs. Expected Value

Financial models typically maximize “expected value”—total lifetime dollars received. But humans don’t experience life in spreadsheets. We experience “expected utility”—the subjective satisfaction and value that money provides.

A dollar at 65 when you’re healthy, active, and eager to travel might provide far more life satisfaction than that same dollar at 85 when health limitations restrict your activities. This isn’t mathematical—it’s deeply personal and varies by individual.

The Seven Hidden Risks of Delaying

1. Mortality Risk: The Ultimate Uncertainty

Breakeven analyses use average life expectancy, but individuals don’t experience averages. You either receive the benefits or you don’t. Dying at 78 after delaying until 70 means you received eight years of higher payments but missed out on eight additional years of benefits you could have claimed at 62.

2. Sequence of Returns Risk: The Portfolio Devastation Scenario

Delaying Social Security (sometimes) requires funding early retirement from other sources—typically your investment portfolio. If markets crash early in retirement while you’re making substantial withdrawals, you can permanently impair your portfolio’s ability to recover.

Consider retiring in 2007 at 62 and funding eight years of expenses from your portfolio while waiting until 70 to claim Social Security. The 2008 financial crisis combined with continued withdrawals could devastate your nest egg, potentially leaving you worse off than if you’d claimed earlier and preserved more portfolio assets.

3. Opportunity Cost: The Compounding You Sacrifice

Every dollar withdrawn from your portfolio to delay Social Security is a dollar that can’t compound and grow. Standard breakeven analyses often assume a 0% discount rate, essentially treating money as if it has no time value. In reality, those foregone investment returns represent a significant hidden cost of delaying.

4. Health Span Risk: When Money Arrives Too Late

Life expectancy and “health span”—the years you’re healthy enough to enjoy active retirement—aren’t the same. You might live to 90 but only be physically able to travel and pursue active hobbies until 75.

Delaying benefits might maximize income during years when declining health prevents you from fully enjoying it, while claiming earlier provides funds during your most active and healthy retirement years.

5. Underspending Risk: The Psychology of Nest Egg Preservation

Research consistently shows that retirees feel more comfortable spending regular “income” than drawing down their accumulated “nest egg.” The Social Security choice of delaying might cause you to live more frugally than necessary during your early retirement years, sacrificing experiences and enjoyment while you’re most able to appreciate them.

6. Loss of Spending Optionality: Portfolio Flexibility vs. Fixed Income

Investment portfolios provide flexibility for lumpy expenses—helping a child with a home down payment, replacing a car, taking an extended trip, or handling unexpected medical costs. A fixed monthly Social Security check provides consistency but lacks this adaptability.

Delaying benefits means relying more heavily on a fixed payment structure later in life when unexpected expenses or opportunities might arise.

7. Regret Risk: The Psychological Weight of “Wrong” Choices

The emotional impact of claiming decisions varies asymmetrically. Consider two scenarios:

Scenario A: You delay until 70, receive two years of enhanced benefits, then receive a terminal diagnosis at 72
Scenario B: You claim at 62, live to 95, and could have received larger monthly checks

While both represent suboptimal mathematical outcomes, the psychological burden likely differs dramatically. The regret and anger of delaying only to die shortly after might exceed the disappointment of a 95-year-old who claimed early.

If anything, this scenario is one worth playing out in your head, and perhaps asking your spouse, if applicable.

Creating Your Personal Claiming Strategy

The Social Security choice should emerge from careful consideration of your complete situation, not from a universal rule or simple breakeven calculation.

Essential Questions to Guide Your Decision

Financial Foundation

Do you need Social Security income now to cover essential expenses?
Do you have other income sources (pension, rental income) that reduce dependence on Social Security?
What’s your overall asset level, and how much portfolio withdrawal flexibility do you have?

Health and Longevity Assessment

What’s your current health status?
What’s your family history regarding longevity?
Are you in the “health span” phase where you can actively enjoy retirement?

Work and Income Plans

Do you plan to continue working?
If working past FRA, could you eliminate debt or boost savings while receiving Social Security?
How would continued employment affect your benefit calculations?

Risk Tolerance and Psychology

Are you comfortable with the longevity bet that delaying represents?
How would you emotionally handle dying shortly after delaying versus living long after claiming early?
Do market volatility and sequence of returns risk concern you?

Legacy and Family Goals

Is maximizing your spouse’s potential survivor benefit important?
Do you want to preserve portfolio assets for non-spouse beneficiaries?
How important is having flexible funds available for family assistance?

The Framework for Decision-Making

Rather than defaulting to “delay until 70” or “claim at 62,” consider this framework:

Claim Earlier (62-FRA) When:

You have health concerns or shorter family longevity history
You highly value active retirement spending during your healthiest years
You’re concerned about Social Security policy changes
You have significant other assets you want to preserve for heirs
Market conditions make you nervous about portfolio-dependent strategies
You prefer guaranteed income now over potentially higher income later

Delay (FRA-70) When:

You’re in excellent health with strong longevity indicators
You plan to continue working and don’t need the income
You want to maximize your spouse’s potential survivor benefit
You have other income sources covering essential expenses
You’re comfortable with market risk and portfolio drawdown strategies
Maximizing lifetime benefits is your primary goal

Consider Middle Ground (Claiming at FRA) When:

You want balance between early access and benefit optimization
Your health and longevity outlook are average
You’re risk-averse but don’t have immediate income needs
You want to avoid extreme positions on either end

The Bottom Line: It’s Personal And Mathematical

The conventional wisdom that “delaying until 70 provides the highest benefit” represents an oversimplification that ignores individual circumstances, risk factors, and the subjective nature of value and satisfaction. While true from a dollar-for-dollar standpoint, it may not be the most beneficial to your utility in retirement.

While delaying maximizes monthly benefits and lifetime dollars under certain longevity assumptions, it also introduces multiple risks that simple breakeven analyses ignore: sequence of returns risk, opportunity costs, health span limitations, and psychological factors that affect actual life satisfaction.

This being noted, you may still find delaying to 70 is right for you – and some retirees may have said it’s the best decision they have made.

Your Social Security claiming decision should reflect your health, your financial situation, your risk tolerance, your values about enjoying life versus maximizing dollars, and your family circumstances. There’s no universal “correct” answer—only the answer that’s correct for you.

The goal isn’t to maximize a number on a spreadsheet. It’s to optimize your actual retirement experience, accounting for both financial security and life satisfaction. Sometimes that means claiming early to fund experiences while you’re healthy. Sometimes it means delaying to maximize security. Often it means something in between.

Make your decision based on comprehensive understanding of both the mathematical and human elements, not from following rules that may not fit your situation.