Retirement Blog

Finance Blogs » Retirement Blog » Social Security — just say ‘no’

Social Security — just say ‘no’

By Jennie L. Phipps ·
Tuesday, August 6, 2013
Posted: 7 pm ET

It's my birthday. I'm 62 and old enough to claim Social Security. But I'm not filing. Here are four reasons why it's not part of my retirement planning.

Claiming early means I'd take a haircut. Taking Social Security before full retirement age -- 66 for people born between 1934 and 1954 -- reduces the monthly benefit by 25 percent.

I don't need it. Seventeen years ago this month, I used my unemployment to keep the family afloat while I started my own business. In the last couple of years, I've been racheting down the amount of time I spend working, but I like what I do and I'm not ready to hang up my work boots.

Working and claiming add up to missing money. If I file for Social Security before my full retirement age of 66 and keep working -- earning more than $15,120 -- Social Security will subtract $1 from my benefit payments for every $2 I earn. Once I reach my full retirement age, Social Security will recalculate my benefit to reflect the earlier payments I didn't get, but I'd rather keep my paycheck, thanks. Plus, once I reach 66, I can work and earn all I want and my Social Security won't be affected at all.

Patience pays off. The magic age is 66. That's when people my age can claim full Social Security and take advantage of claiming choices. Here's the strategy I'm considering. Because I'm married, at 66, I'll be able to restrict my claim to half my spouse's Social Security and let the value of my own grow 8 percent a year, plus cost-of-living adjustments, until I can claim the maximum amount at age 70. Using this strategy increases what I'll get in benefits compared to claiming at 66 or delaying altogether until 70 by more than $70,000 by the time I'm 85 -- more if I live longer than average, according to calculations by Social Security Income Planner, a sophisticated Social Security benefit calculator.

One last thing: I used to think 62 was over the hill, but I was wrong. At 62, I still feel like I'm only halfway up.

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
Gen X
February 13, 2014 at 6:14 pm

To all of you who advocate taking SS early and maximizing...have you ever thought about what you're doing to your children and grandchildren??? You're leaving us with NOTHING!! Taking when you don't need it and taking more than you need is criminal. And don't give me the line about you paid in for yourself. You paid for your parents' SS, not yours. SS is a SOCIALIST program. The generations behind you pay for your Medicare and SS. The amount you put in is not enough to support you for 30 years unless you are in the 1%.

Helmut Karkowski
February 12, 2014 at 10:40 pm

When you study cash flow management there is such a thing as the discounting of cash flow. What is the current value of the projected future earnings? If you’re age 62 and plan on retiring at 66; go for it if you currently have a high enough paying job. It sounds kind of financially illiterate to not consider the discounted value of future earnings. Discounting of cash flow is the opposite of gaining interest. What if early retirement means having the capital to become self-employed in an online business or trading in the financial markets? Waiting till age 66 to retire could mean subtracting away 4 years of business opportunities. Starting a business at age 62 could result in a far greater return on investment then the meager 25% increase S.S.R. income at age 66. Don’t let your financial success be defined by the consensus of losers!

tom snig
February 07, 2014 at 8:51 pm

Take it as soon as you can, as long as you dont miss a meal.

February 06, 2014 at 4:44 pm


Joe From Hell
February 06, 2014 at 10:53 am

they want you to wait so that you die before you get any money...if you can get it at 62.5 GO FOR IT!!! and live a LONG LONG LIFE!!! it will all pan out equally at the end... and if you worried about SS and working ...WORK LESS!!! or buy rental property..

john headley
February 05, 2014 at 3:13 pm

Take it as soon as you can because either SS will go broke and Obama will use the excuse to take benefits away and give it to his welfare giveaways and/or when you reach 70 you will not be allowed to live any longer (unless pain pills will take care of your sickness) since no major health repair job will be allowed by the death panels. Believe it.

Tart of Darkness
January 31, 2014 at 8:36 pm

Taking benefits earlier results in getting less total money, but you are really betting that you will live to be much older than you might live. I'm taking mine when my hubby takes his. He'll be 66 and I'll be 63. That's the best bet for us because my health isn't all that great. We can take the benefit and invest it for if we need it later. I think that's better than not getting it at all by waiting.

January 31, 2014 at 7:06 pm

Good thing you will live forever.

January 30, 2014 at 1:51 pm

Taking Social Security before full retirement age -- 66 for people born between 1934 and 1954 -- reduces the monthly benefit by 25 percent.

Lawyers ain't so good in math . . . think that's why they get into LAW!

I'm 73 and born 1940 - so, YOU do the math and CORRECT this very old presentation!

between 1947 and ????

katherine Rus
January 28, 2014 at 2:27 pm

I lost my husband at age 50 so I had to work to make a living. at age 66 I took my social security to help pay off my debts and at age 70 still working to make sure my car is paid off and I have an emergency fund. I am hoping to retire this year because when I reach 70 1/2 I have to take 4% out of my investment account. I am glad I have been able to work for a company that allowed me to work not everyone has that choice.