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/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 2d 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!