Social Security dilemma: Collect early and invest vs waiting until FRA - which strategy wins financially?

This is an excellent question, and one I've helped many people work through. The answer isn't as straightforward as some make it seem. For scenario #1 (waiting until FRA): - Pros: Larger monthly benefit for life (~30% more than early filing) - Cons: Missing 5 years of payments, opportunity cost of those funds For scenario #2 (early filing + investing): - Pros: Money in hand sooner, potential investment growth, flexibility - Cons: Permanently reduced benefit, tax implications, market risk The breakeven point is typically around age 80-82. If you live beyond that, waiting to FRA usually wins. But this assumes average market returns. Some other factors to consider: - Your other income sources and tax situation while working - The earnings test - if you're still working, SSA will withhold $1 in benefits for every $2 you earn above $21,240 (2025 limit) - Survivor benefits - if you're married, your spouse's survivor benefit is based on your benefit amount - COLA adjustments apply to your base amount, so larger base = larger COLAs The best strategy really depends on your complete financial picture, not just the SS numbers.

DON'T DO IT!!! I filed early at 62 thinking I was being smart and now I DEEPLY regret it. The reduction is PERMANENT and they don't tell you how badly it affects you later!!! The monthly check difference is WAY bigger than I expected and gets worse with every COLA increase. And don't forget about Medicare premiums that come out of your SS check - larger check means more left after Medicare!!!! The whole "invest the money" thing sounds good in THEORY but in REALITY you won't do it! Most people end up spending it, trust me. And the market can CRASH right when you need the money. I'm 72 now and would give ANYTHING to go back and wait until my FRA. Don't make my mistake!!!

What you need to understand is there's no perfect answer - the Social Security Administration designed the early vs. FRA vs. delayed credits to be roughly actuarially equivalent based on average life expectancy. However, your specific situation creates some complications: 1. The earnings test will significantly reduce or eliminate your benefits while working before FRA. Any benefits withheld are recalculated at FRA, but this greatly complicates the "take early and invest" strategy. 2. Taxes - if you're still working, up to 85% of your SS benefits could be taxable, reducing the amount available to invest. 3. Market risk - the S&P 500 has historically returned about 10% annually, but that's an average with significant volatility. A market downturn early in retirement can devastate this strategy. 4. For married couples, the higher earner's benefit becomes the survivor benefit, so maximizing the higher earner's benefit provides insurance for the surviving spouse. I'd recommend using one of the specialized SS calculators like Open Social Security or Maximize My Social Security to run your specific numbers, including life expectancy, tax situation, and marital status.

my neighbor started collecting at 62 and he says its the best decision he ever made. says life is too short to wait for money thats yours anyway. he went on a alaska cruise with his first check lol

I had a similar dilemma last year. Tried calling SSA for MONTHS to discuss the implications with someone who could look at my specific earnings record. Always got disconnected or waited 3+ hours. Finally used a service called Claimyr (claimyr.com) that got me connected to an SSA agent in under 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent was able to run calculations based on my specific work history and showed me that in my particular case, waiting until FRA made more sense because I had some zero earning years that would drop off by working longer. Your situation might be different though.

has anyone run actual numbers on this??? all i see are opinions but what do the REAL calculations show??? I'm in same boat and want to know the math not just what ppl think

Is anyone going to mention how the earnings test basically makes this question irrelevant? If you're going to continue working at a decent salary, you WON'T GET your Social Security benefits anyway until you reach FRA. The 2025 earnings limit for people under FRA is $21,240. After that, SSA withholds $1 for every $2 you earn above the limit. So if you're making $71,240+ annually, your entire benefit will be withheld until you reach FRA. Yes, they recalculate your benefit at FRA to give credit for the months benefits were withheld, but this makes the "take early and invest" strategy impossible to execute unless you're only working part-time.

Dont forget about the STUPID WEP and GPO if you have a pension from non-covered employment!!! THAT will DESTROY your benefit calculations and the SSA reps NEVER mention it until its TOO LATE!!!

my sister took it early and my brother waited and they both complain all the time so maybe it doesnt matter lol. social security isnt enough money either way these days