Social Security: Why You Shouldn't Regret Taking Benefits at 62

Financial analysts and commentators have established a cottage industry out of making retirees feel guilty about taking Social Security benefits early. But not only are these so-called experts lacking in empathy; they may also be wrong.

Consider this headline from a recent survey of retirees: "Many Regret Decision to Take Social Security Early."

Sounds ominous, right?

Well, the problem is that the title isn't entirely supported by the survey's actual results, which found that only 38% of respondents "say they wish they would have waited" longer before taking benefits. According to this, in other words, somewhere along the lines of 62% of respondents, or a large majority, evidently don't regret the decision.

And why should you? As Motley Fool contributor John Maxfield explains in the following video, the Social Security Administration has designed the benefit formula to pay the same amount of total benefits over the life of a typical person irrespective of when they elect to take them.

Additionally, as John goes on to discuss, taking benefits sooner rather than later can facilitate an earlier retirement, which allows retirees to escape the physical and psychological wear and tear associated with many jobs.

The net result, John concludes, is that "the only person who's qualified to determine when the best time for you to take benefits is you."

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Read/Post Comments (23) | Recommend This Article (161)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 28, 2014, at 10:48 AM, GirlScoutDad wrote:

    Thanks. a good Foolish reply to a truly foolish press release.

  • Report this Comment On June 28, 2014, at 12:00 PM, Stelios22 wrote:

    Any design by SSA for the system occurred many years ago. People live longer now and are active till much later in life. This means that if the formula was well balanced then, now it favors those who take retirement late. The life-expectancy of a 62-yo has changed significantly.

    So only take Social Security early if you have to--or if you have serious health issues that cloud your prospect for a long life.

  • Report this Comment On June 28, 2014, at 12:53 PM, arkbiz wrote:

    Bad fortune may not be your fault, but odds are, if you take SS benefits @ 62, that you simply are not very provident or you can't count.

    Half of SS recipients live longer than the median upon which SS payments are based. People routinely play lotteries wherein the odds of a significant prize are miniscule - or enter college (w/ all its costs and opportunity costs) when the odds are at least 2:1 against eventually capitalizing on the experience.

    So, 50/50 should get your attention.

    Moreover, by waiting you not only receive bigger checks but you have a bit of insurance against running out of money.

  • Report this Comment On June 28, 2014, at 1:47 PM, GetDown2 wrote:

    Yeah, both of my wife and I received our SS benefits at 62. So we are in that 62% for sure. And yes, we've no regret whatsoever.

  • Report this Comment On June 28, 2014, at 3:01 PM, miamisid wrote:

    Waiting is by far the best advise you could give your followers regardless of whether there is regret involved or not. Guaranteeing you lock yourself into getting the highest monthly [yearly inflation adjusted] check trumps grabbing the money early. If waiting is an option waiting it should be. I am surprised by your advise.

  • Report this Comment On June 28, 2014, at 3:53 PM, Dlittle904 wrote:

    Why would these so called "experts" want to make anyone feel guilty about taking SS at 62?…

    All I know is by waiting I would lose $76K between 62 and 66….To get that back I would have to live to nearly 80. The other major thing is that the $76K

    invested between 66 and 80…(14yrs.) will absolutely dwarf any increased amount I will get after 80 to

    when I drop dead… way way more…These experts are "idiots" in my opinion and aren't looking at the whole picture.

  • Report this Comment On June 28, 2014, at 4:24 PM, thornwalsh wrote:

    The critics of this article are assuming that the actuarial tables underlying the social security payout incremental increases are obsolete. Maybe they are and maybe not. I know the PBGC tables used to seem old when I used them in the 1990s.

    It is said that overly self-centered people are overly optimistic about their own mortality. This was an observation made by an author who lived in the Warsaw Ghetto. You will probably die sooner than you think

  • Report this Comment On June 28, 2014, at 4:32 PM, vsouthe wrote:

    I agree with Dlittle904 no one can predict how long they are going to live. I say take advantage of Social Security as soon as it is available. The only thing is if you still want to work and collect SS how much money can you earn and will you be penalized.

  • Report this Comment On June 28, 2014, at 4:36 PM, thornwalsh wrote:

    Also, there can be compelling reasons to claim early if you are in dire need of cash, for example, if you hypothetically had a loan from a loan shark at 25% interest.

    For married people, the lower paid spouse can collect a derivative benefit if the higher paid spouse "claims and suspends" and later the lower paid spouse can convert to a higher benefit.

  • Report this Comment On June 28, 2014, at 5:37 PM, carlitopen wrote:

    There seems to be a lot of misunderstanding here, there are no guarantees in life, you pay into a fund where you hope to live to collect on, who's to say you make it to 66, we all have seen where the generation behind us may have to wait till 70 to collect, they never show you what percent of people don't make it to 66 because it's there profit, it's there purpose to tell you to collect later because they know that there's a percentage of you who won't make it, do you think these people are your friend, then why don't they tell you what percentage of people don't make it to 66 so we can make a good decision, I'm 63 and I started mine and I can only make $15,490 working, so that's like a little over 2,000 a month and I know some of you can't do that, but for every $2 you make above your cap they take $1 or 50% and there's no cap on that, so if you make $200,000 above your cap they take $100,000 of it, my suggestion to all of you is cut your bills to a minimum, pay your house and car off before you retire, all of you need to study investing of your money before you retire, do not depend on someone else to do it for you because no one loves you and your money more than you do or you may be seriously broke, this system is set up to take your money, also look for the best places to live for retirees, learn to cut corners and learn to save a set amount of your monthly retirement, my minimum is to start $200 a month or $2400 a year, the insurance companies has the numbers on how long people live and ssa uses these I'm sure, if you are making close to what you made working then I suggest you try to save half of your retirement check every month, this is about planning and lifestyle change, plan to live longer, so your quality of life is good, if you have health issues then it may seem like you won't live much longer but who's to say that you won't, the last thing to do is live for now because you will be a burden on your relatives like that, educate yourself and study the retirement lifestyle, it can be a good life or a bad life, if the dollar collapses we all will be in trouble, hope I have helped someone because this is not about what you make but what you do with what you make.

  • Report this Comment On June 28, 2014, at 6:45 PM, glrnelson wrote:

    I agree with everything from dito904,,,, but one thing... your comment " "experts" want to make anyone feel guilty". As I have learned in life, you are in control of your feeling- feeling guilty, anger,etc is your reaction that you control so in reality, you make yourself feel guilty. Other than that, I'm taking my funds early and what is not calculated into this model is the earnings you could make during that same time that. I usually earn ~15-25% profits,,, this year,, 42% (FVD). So.....given the dividends I earn and my profits, there is no way that not taking the money is the right thing. This is the second article in the past couple weeks on this subject,, which just surprises me- almost everyone of the article note to wait. Use your best judgement where you are in life- not everything fits into one model

  • Report this Comment On June 28, 2014, at 10:05 PM, sporked wrote:

    Social Security: Why You Shouldn't Regret Taking Benefits at 62?

    Because theres no guarantee you will live to 63!

  • Report this Comment On June 28, 2014, at 10:21 PM, sporked wrote:

    carlitopen, its the social security they take, not your earnings over the cap.

    If you are under full retirement age for the entire year, they deduct $1 from your benefit payments for every $2 you earn above the annual limit.

    For 2014, that limit is $15,480.

  • Report this Comment On June 28, 2014, at 10:30 PM, sporked wrote:

    My wife is a couple years older and will be collecting at 62. Why wait. If I die she automatically goes to my rate anyway which is more than if she waited to 66 to collect You pay taxes as income on a joint return. Just have withholding taken out from the SS check..

  • Report this Comment On June 29, 2014, at 12:22 AM, FeralGrubment wrote:

    carlitopen, not only are you completely off base by thinking they will take half of your income over the allowance but even the half of your social security that is reduced for over the limit wages is not lost. That money is recaulated into your social security check after full retirement age. A writer for the Fool and social security expert named Dan Caplinger recently explained this in one of his articles.

  • Report this Comment On June 29, 2014, at 8:56 AM, Mac10s wrote:

    Is the $1 taken for every $2 made before full retirement ever received back by the retiree?

    I heard it was.

  • Report this Comment On June 29, 2014, at 11:39 AM, booboobear wrote:

    I am retiring at age 62. I draw my first check Sept 10, 2014. I will draw $1,660.00 per month.

    If I wait till full retirement age of 66, I will draw another $508.00 per month but:

    I will be leaving $79,680.00 on the table for those four years waiting till I am 66.

    It will take three more years to pick the $79,680.00 back up I left on the table from 62 till 66.

    I would be 69 years old before I ever draw one penny more than I would have if I had retired at 62.

    This is not taking into account inflation that will reduce the buying power of one dollar from 2014 to 2018.

    The government is betting you will not live long enough to get all of the money you paid in back and if you wait till full retirement age their odds keep going up in their favor.

    What do I plan to do? I am retiring at 62 taking my SS and do what I want to with the rest of my life.


  • Report this Comment On June 29, 2014, at 2:34 PM, VAContrarian wrote:

    booboobear, it will take much longer than three years to pick up the $79,680 you left on the table. At only $508.00 per month less per month going forward from 66, it would take you 156.8 months or just over 13 years before your total take is less than if you started at 66. That means you end up with less only if you live past 79 (not 69), and that doesn't count the additional earnings you might make by investing that $79,680, or not having pulled it out of other retirement savings which would continue to grow.

  • Report this Comment On June 29, 2014, at 4:39 PM, hummingbird06 wrote:

    These articles make me grit my teeth. They are so broad stroke and one-sided. I make about 90K a year. If I started collecting this year when I turn 62, how much would I never see because of the working penalty, and how much would I have to give back due to income tax? Only a small sliver of my benefits would wind up in my banking accounts, AND I would be guaranteeing a lower rate for the rest of my life. I'm in great health, and my mother lived to 90! No WAY am I taking it as long as I'm at my job and under 66. It makes TOTALLY no sense.

  • Report this Comment On June 29, 2014, at 10:16 PM, ndwell wrote:

    I'm claiming at 62 for a reason not brought up in the article or any of the previous comments. As the father of two minors, they can draw half of my monthly payment up until the age of 18. So my daughter will get 6 years of money and my son two. On top of what I will be getting each month.

    That is certainly a way to help pay for college, cars and everything else that comes along.

    My wife is 8 years younger, so she'll still be a full time earner.

  • Report this Comment On June 30, 2014, at 12:18 AM, birge1 wrote:

    we certainly don't regret it ! all other articles are just govt psycho babble designed to delay claims so criminal politicians have more time to steal our $$, plain and simple !!!!!!!!!!

  • Report this Comment On June 30, 2014, at 8:29 AM, lionfour wrote:

    If you wait until the age of 67 to start collecting benefits instead of age 62 it takes ten years before you break even!

  • Report this Comment On July 02, 2014, at 11:24 PM, Energo wrote:

    In my situation, assuming a 4% return on my investments, if I take Social Security at age 63, and therefore take less from my investments, my breakeven point is at age 97+.

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John Maxfield

John is The Motley Fool's senior banking specialist. If you're interested in banking and/or finance, you should follow him on Twitter.

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