As a financial writer, I spend a lot of time talking about the ideal age to claim Social Security. As a result, it may come as a surprise to hear that I don't really have a solid strategy for when I'll claim my benefits -- and I probably won't create one.
Although this may sound counterintuitive, there are actually three really good reasons why I'm not spending a lot of time worrying about the age when I'll first start getting my retirement checks.
1. Social Security will play a small part in my retirement income
While it will be nice to get Social Security benefits, I don't expect to rely on them as a major source of my retirement income. In fact, because of possible future benefit cuts and the uncertainty as to how much money these benefits will provide, I'm making sure I've saved enough to support myself in the future even without a single dollar from Social Security. Any funds that come from these benefits will just be extra money I can use to support causes I care about, help out my kids, or indulge my hobbies.
Since these benefits won't be a huge source of funds for me, I'm devoting my time and energy to figuring out how to maximize my other retirement investment accounts instead of evaluating all the different Social Security claiming options and trying to game out the amount of money they'd produce.
2. The future is impossible to predict
One of the big reasons to devise a Social Security claiming strategy is to try to maximize lifetime income. But to do that, you have to make predictions about how long you're going to live. After all, those who live beyond their projected lifespan end up with more lifetime money by waiting until 70 to start benefits, while people who pass away early would get more money by claiming them as early as possible.
While the odds are that delaying is the better choice, no one can really know that for certain. Because of the uncertainty, I'm not eager to expend a lot of effort on trying to predict my lifespan or to calculate exactly what my break-even point would be with different strategies so I can try to figure out if I'll live that long.
3. My claiming choice may be affected by circumstances outside of my control
I'm still a long way away from retirement, and a lot could change with Social Security by the time I get there. Social Security benefits may be cut because the program's trust fund runs out of money. Or lawmakers could make full retirement age later or could impose other limits on benefits, such as means-testing them. These changes are outside of my control.
For many retirees, the decision about when to actually claim benefits is also outside of their control. For example, it's common for retirees to end up claiming benefits earlier than they planned because they can't continue working due to health or family issues or a lack of job opportunities.
While I don't expect to be forced to claim benefits early, since I will hopefully be able to rely on my retirement savings if I end up quitting work sooner than anticipated, I can't know for sure if outside circumstances will affect my decisions. The market may crash just when I get ready to retire, for example, and I may decide it makes more sense to claim Social Security ASAP and use some of those benefits to live on while my investments recover.
Of course, not devising a Social Security claiming strategy is a luxury that really only works if you have plenty of outside savings. If you're going to depend on these benefits as a sole or primary source of support -- or if your spouse may end up doing so after your death -- trying to maximize them is important. But if you don't want to find yourself in a position where Social Security benefits play such a big role in your retirement security, make sure you're doing all you can now to save a substantial nest egg that will support you no matter what benefits you get in the future.