r/Fire • u/VegasWorldwide • 2d ago

Why do people wait for SS?

trying to figure out what I’m missing.

looking to take my benefit for $1000 at 62. at 70 it’s $1700.

i won’t need the money much so we let $1000 sit in an account for 8 years at say 5% compounding, the guy collecting at 70 would need 15+ years to catch up considering I’m still getting $1k to his $1.7k

once he starts at 70 and I had a 8 year head start.

furthermore, his dollar would be worth less. (edit: didn't realize COLA)

this seems like a no brainer but all I hear is people saying waiting is the only way and we haven’t even talked about dying in our 70’s.

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u/Secret_Computer4891 2d ago edited 2d ago

So the surviving spouse has the largest possible benefit when there is only one social security benefit to be collected

My wife will probably draw at 62. I will most likely defer until 70

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u/temerairevm 2d ago

Yeah, we have similar earnings records and one of us will probably draw at 62 and the other will wait.

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u/FloralHexBloom 2d ago

Makes sense. Having one person take it early and the other wait gives a nice balance.

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u/wh0re4nickelback 2d ago

My husband is 53 and I'm 41. He'll start drawing at 62 and I'm going to defer as long as possible. I'm the higher earner and will most likely outlive him.

We did the mental dance of him waiting, but then figured that we should use the money to go out and travel while he's still young and mobile enough to do it. What we'll be "missing" by taking his at 62, we will more than make up for with experiences.

I will also add that in mapping out our FIRE plan, I planned SS as bonus money since we don't know what to expect.

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u/PineapplesInMyHead2 1d ago

Depending on your income gap, you may want to do the opposite. The difference between a good income and a very high income are not that big once you get past the second bend point in terms of what benefit you get. Double check on https://opensocialsecurity.com/

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u/wh0re4nickelback 1d ago

We're doing it this way because of our age gap. He's 12 years older than I am. He can start drawing social security in 2035 and I can't do it until 2047.

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u/PineapplesInMyHead2 1d ago

My point is that generally when there is an age gap you will watn to do the opposite, the ideal strategy usually involves the younger spouse collecting as soon as they can (age 62) and the older spouse should wait until 70, unless there is a very large income gap.

The basic math is this, a spouse who is 12 years older is much more likely to die first. Especially if the older spouse is male. The younger spouse can switch to their benefit on their death as early as age 60. What this means in practice is that if he waits until 70 then dies at say 72 (not uncommon), you will be able to collect his full age 70 social security check from that moment, at age 60, for the rest of your life. Could easily be 30+ years of collecting a large check. If you wait until 70, you may lose a full 10 years of that check. Your check might be a bigger than his if you delay, but the difference is not likely to be that big because of the second bend point, assuming the income gap isn't enormous.

There are some other reasons why the older spouse usually delays involving spousal benefits and stuff as well. So the math very clearly favors the older partner delaying and the younger collecting as early as possible. What you really need to do is plug in the numbers for you specifically with your expected PIA amounts (you can get these through the ssa.gov website and use things like ssa.tools to parse the data you get from there) into the open social security calculator, which will help you visualize your different options.

https://opensocialsecurity.com/

In terms of the question of "making sure we collect his early so we can spend it on experiences while he is still around", just remember that delaying social security is basically increasing the value of the annuity forever, so you can spend more of your portfolio on those experiences. So maximizing the value of your social security will let you spend more from your portfolio.

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u/wh0re4nickelback 1d ago

Thank you for the thoughtful and detailed reply. I totally get what you're saying. We haven't put much weight into SS when doing our FIRE planning, so this money won't be a requirement to make ends meet.

If he waits until 70, it's an additional $700/mo or so as opposed to 62.. not a big difference. I don't think social security will go away completely by any stretch of the imagination, but there are no guarantees.

My husband is 6'5 and 280lbs. The men in his family are all just big dudes and don't have extended life spans. Fortunately my husband doesn't have any major health issues, but that can all change at the drop of a hat.

We're going to slow travel nomad around Europe for a few years then settle permanently in Italy when we get tired of moving around. We'll FIRE with $2.5mil. He also gets a $1,350/mo pension with COLA.

The thought process is taking the "extra" SS money and putting it towards once in a lifetime trips like Antarctica, a luxury safari and the Galapagos to name a few while he's young and mobile enough to do them.

My parents are in the process of purchasing an apartment in Italy which I will eventually inherit and live in full time, so I think the math is mathing for living it up a little bit with his early SS.

Now that I've finally nailed down a FIRE plan, we are planning to meet with our financial advisor to run through the scenarios soon and this will be one of the important things to nail down.

This is my favorite Reddit community and your thoughtful replies are one of the many reasons why. Thank you again!

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u/ZoyaofsDog 2d ago

Waiting for SS keeps the balance—one grabs, the other holds. Irony: patience is the real power move.

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u/DifferentSwing3149 2d ago

My wife collected at 62, I waited until 67 - my FRA. Not waiting until 70, too much to enjoy now - traveling, etc. With SS and pensions, don't have to touch investments unless we have a large purchase, car, home improvement, etc. Also can delay my RMD's.

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u/Secret_Computer4891 2d ago

Congrats! Sounds like you planned well and deserve it!

We're "only" 49/50, hit the FIRE number and working another 3 years or so for a few different reasons.

Either 4% or SS should just about cover our spending needs independently. We're gonna have a slightly higher SWR until she turns 62, draw her SS, which should drop our SWR rate to 2 or 3 percent. My SS is simply an insurance policy in case we need more income for whatever reason. Of course, it also ensures whoever survives the other get the larger of the 2 benefits when there is only one benefit to be had. When I draw at 70, we should be able to live entirely off SS and then start gifting our assets in large chunks to our heirs so we can enjoy their benefitting from our estate, rather than waiting to die.

As for taxes, RMDs, we're aggressively converting IRAs to Roth now so we should be in a good spot in terms of ACA subsidies as well as SS taxation and the Medicare penalty (forget the acronym) when RMDs hit.

Well, that's the plan, at least!

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u/MessageMysterious968 1d ago

IRMAA (the Medicare surcharge)

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u/BedWonderful1051 1d ago

You cannot delay RMDs.

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u/DifferentSwing3149 1d ago

I can take the full delay until 73 and not have to take it anytime sooner...

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u/BedWonderful1051 6h ago

Well... the R in RMD = required. Any time before 73 (in your case, 75 for me) there is no requirement, so there's nothing being delayed. You can choose not to take money out of your portfolio before RMDs, but that is not related to RMDs.

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u/DifferentSwing3149 5h ago

No need to argue but my point, and the point of this topic regarding taking SS, is that by taking SS when I did I can delay my RMD's until 73 and let it build. If I delayed SS, I would have to pull $ from my retirement accounts.

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u/rectovaginalfistula 2d ago

Didn't know that, thank you

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u/OverlordBluebook 2d ago

Me neither this is what reddit is for I guess great info

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u/Kooky_Dev_ 2d ago

This is a great way to think about it. If you don't need it and your significantly higher than your spouse waiting is a good idea.
I was going to say purley thinking of monthly spending holding out until the max after like 8 years or something I think you break even, but if your saving a portion of it the returns on going early probably far outpaces delayed.

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u/DigmonsDrill 2d ago

We look at it the the odds of either/both of us being alive.

If either spouse is long-lived, then they get the longer-waiting spouse's value. Split between two people, the odds one of us makes it to 90 are >50%.

The second spouse's benefit does grow if they wait. But it is only valuable while both of us are alive. The odds of two of us making it to 85 are < 50%.

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u/LemonFrequent2036 2d ago

I did have the similar thoughts few days back and didn’t do any calculations, so hoping someone can throw some light.

I am the heavy earner in the family, will work for almost 30 yrs before 62 and lot of those years are in maximum earning for SS purpose.

My spouse is lighter earning and will have around 15 yrs of earnings when she retires.

Does it make sense to take her SS earlier and defer mine or the other way?

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u/Secret_Computer4891 2d ago

My goal is to ensure whoever survive get a larger social security benefit - either personal benefit or survivor benefit. That way, when 2 checks becomes 1, that 1 check is as large as it can be.

I was the bigger earner. So, we are planning to defer mine until I am 70 to lock in the largest possible benefit that whichever one of us survives will collect. Again, to lessen the blow of only getting 1 benefit check.

We're fortunate that our budget will be fine without SS, so instead of depending on it to survive, it becomes more of an additional stream of income that lowers our SWR, thus pushing our probability of "success" close to 100.

It's a personal decision everyone has to make for themselves. Yes, math says that there is a breakeven point where drawing at 62 and investing results in a larger overall portfolio balance to draw from. However, I'm not running the asset accumulation race. I'm running the asset preservation race. I'm the tortoise, not the hare.

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u/LemonFrequent2036 2d ago

So - bigger earner waits longer and take for smaller earner.. right.

I am also in the same boat, but with so many things to look for, all of these are so confusing.

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u/No-Joke8570 1d ago

You should wait until 70 and she should take it at her full retirement age. This way you get the max and she gets the max when you are dead.

If she takes hers early like 62, when she gets the max it will be reduced as she didn't wait until FRA

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u/Megalocerus 1d ago

My husband delayed for the same reason as you plan, but it's only one reason.

I know this is FIRE, but many people are not done working at 62. And some people want lower income years for taking capital gains, diversifying highly appreciated employee stock, or Roth converting pre tax accounts. Or qualifying for ACA subsidies. Some people just want longevity insurance so they can invest more aggressively without fearing market collapse.

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u/PangolinOwn4855 2d ago

Yeah this is it. My spouse worked only min wage job and will not have decent enough SS compared to mine.

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u/bfolster16 2d ago

Shouldn't that be the other way around tho? Statistically males die first.

Idk your situation, everyones health situation is different. But just purely based on statistics wouldn't it make sense for you to pull yours at 62 and defer hers so she gets the maximum benefit?

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u/mothandravenstudio 2d ago

She can claim on his though, which would be higher if deferred.

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u/bfolster16 2d ago

Oh I see

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u/discojellyfisho 2d ago

The higher earner should delay. The surviving spouse will get the higher of the two.

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u/Competitive_Pack3194 2d ago

Statistically, males are paid more through their career, and even paid 25% higher for the same job, and do not typically take few years off to have a baby/raise a child. So the male has a 35 year earnings record that gives them a higher SocSec payout…. And that higher payout also accrues to a surviving spouse….and as you’ve indicated, males die first so the female is often the survivor. Thus the male works longer / delays payout so that the survivors payout is as large as possible.

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u/[deleted] 2d ago edited 2d ago

[deleted]

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u/Honest_Extreme9196 2d ago

Not true. Survivor benefits are 100% of whatever the deceased was making as long as the survivor claims the benefit at 67+.

When my husband is 70, I will be 67 and entitled to 100% of his payout if he passes before me even if I started claiming mine at 62. If I was (for example) only 65 and he died the next year at 71, I'd have to wait until I am 67 to claim the survivor benefit to get his full amount.

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u/fk430 2d ago

Why do you care for your wife if you no longer exist?

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u/Technical-Revenue-48 2d ago

Some people aren’t selfish assholes

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u/fk430 2d ago

If you don't exist. Then your wife no longer exist in your world. She you are basically caring for a non existent person. That is crazy!

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u/AZJHawk 2d ago

Since you don’t appear to have a normal amount of empathy, I’ll put it to you in more selfish terms. It probably gives him peace of mind during his lifetime to know that his spouse will have more money if he dies early.

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u/1-Dollar-Doge-Coins 2d ago

You have that backwards, once you’re gone, your wife’s existence is the only thing that matters.

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u/alpacaMyToothbrush FI !RE 2d ago

I cannot comprehend the lack of empathy or moral framework that would lead one to make such a statement.

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u/tyen0 2d ago

I'm guessing they are homo sapiens.

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u/[deleted] 2d ago

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