When to draw Social Security

[lcarpenter79]

claiming Social Security early has a benefit that is rarely discussed. The combined annual benefit for my wife and I is about $45,000. Drawing this amount instead of withdrawing this from our IRA, allowing this amount to grow within the IRA. If invested in an S&P 500 ETF, this has earned roughly 15% each year for the past 3 years. In addition, the COLA has been 8.7% in 2023, 3.2% in 2024, and 2.5% in 2025. The ability to keep the equivalent amount of SS payments invested should be a consideration in everyone’s decision for when to claim early vs waiting to claim SS at full retirement age. My breakeven for claiming early is around 90 years of age, due to the investment returns… my recommendation is to claim early and stay invested!!!

[fishdoggy1]

There are so many variables for this decision and best projections can end up wrong. People should do what you are doing and look at when you will have the same amount of money by waiting till you are 70 versus taking money early and investment income in the mean time. The fact that SS payments are also inflation protected is better than a lot of payouts. My wife and I waited till 65 to draw but retired at 62, lived out of money saved and about $12,000 of IRA withdrawals each year. Now age 70 don't regret being retired all these years one bit. Life is like a toilet paper roll, it goes away quicker near the end.

[TRL1111]

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@lcarpenter79 wrote:

My breakeven for claiming early is around 90 years of age, due to the investment returns… my recommendation is to claim early and stay invested!!!

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More accurate would be to say "due to the anticipated investment returns."  Don't forget that past performance is no guarantee of future results.

Also, if you delay taking social security, you'll get a higher benefit, permanently, once you do start taking it.  And it's not insignificant--the increase is 8% per year after your full retirement age.  That should be factored in when evaluating the risk of being in the stock market.

Just like with Medicare, there is no one-size-fits-all recommendation.