Key Points
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Many people focus on optimizing their lifetime Social Security benefits.
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It does seem like a good idea to try to get the most money possible.
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Yet, my advice is to focus on what’s going to give you the best retirement.
When you read Social Security articles, most of the advice you’ll find is about optimizing your benefits. For example, you may hear that you should claim Social Security at 70 because it gives you the best chance of getting the most lifetime benefits. Or you may hear that you should claim Social Security at 62 in order to begin investing the money, which is what finance guru Dave Ramsey suggests.
On some level, all of these tips can make sense. After all, you could increase your chances of collecting the most Social Security money over time by waiting to claim benefits. That’s because many people outlive the life expectancies that were in place when Social Security was designed, so the system of early filing penalties and delayed retirement credits that was supposed to equalize out benefits for early and late claimers doesn’t work very well anymore. It’s also probably true that claiming Social Security at 62 and investing could be a good strategy.
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Still, despite the sound reasoning behind these suggestions, it’s not necessarily the approach I would tell future retirees to take. In fact, if I could give retirees one piece of advice about Social Security, this is what it would be: Remember that the ultimate purpose of your benefits is to give you the best retirement possible.
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This is my best piece of advice for Social Security retirees
There’s a simple reason why I believe the most important piece of advice for retirees is that retirement benefits are meant to help you have the best retirement you can. These benefits were created to keep retirees out of poverty and enable them to live comfortably in their golden years.
The goal doesn’t necessarily have to be to claim every single possible dollar that the program could offer. Your focus should not be beating the system, but instead actually using your Social Security to enjoy life throughout your entire retirement.
If you wait to claim benefits, for example, you’ll end up with a few thousand dollars more each year after you turn 70 compared to starting your benefits at 62. But you might be older, sicker, less able to travel, and not really in a position to enjoy the money.
Sure, you’ll be “richer” on paper since you’ll have larger checks coming in, and of course, you may max out your lifetime benefits and collect more Social Security over the course of the rest of your life. But the price could be that you gave up having fun and adventures during some of the last years when you could have really enjoyed the money and used it to make memories.
Keep the big picture in mind — but focus on what’s important
Of course, this doesn’t mean you should just run out and claim Social Security at 62 and start spending like crazy — especially if doing so could leave you with far too little to live on in your 70s or could doom your surviving spouse to a lifetime of poverty by shrinking survivor benefits.
You need to look at the big picture of your entire retirement. You want to think about how you can best use these benefits to enjoy life as much as possible for all of the years that you will be out of the workforce. This might mean waiting to claim if doing so will keep you from being broke in your 80s, but it may also mean claiming at 62 if doing so enables you to retire early and you’ll still be OK financially if you do.
As you make your Social Security claiming choice, really focus on what’s going to make you the happiest throughout your whole retirement and let that guide your decision rather than just numbers on a spreadsheet alone.
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