Q: My wife and I are both 62. My wife hasn’t worked outside the home in many years. I am still working, but I’m thinking about retiring. However, our financial planner is advising me to keep working and for us to delay taking our Social Security as long as possible. He suggests we both wait until we are 70 years old to maximize our benefits. But I am tired of working and want to quit and start my Social Security. I recall a column you wrote a while ago in which you explained that you and your wife started Social Security when you were 62. Would you consider printing it again?
A: I normally don’t reprint old columns. But I think I will make an exception, as the column is almost 5 years old. I will dust it off, update it a bit and offer the same advice I gave my readers back in 2012. Here we go.
Many readers ask me to serve as their financial planner. But here is the rub: I am probably the last person on the planet you should be asking for advice about money matters.
To be sure, I know Social Security rules inside and out, and I can explain the various maximizing strategies that are all the rage among retiring baby boomers. And I know from the emails I get that those strategies have countless seniors worried sick that they won’t be able to squeeze every last nickel out of their Social Security account.
I am endlessly fascinated and, I must admit, sometimes even a little put off by some people’s obsession over money. Don’t get me wrong: Money is great, and it’s obviously better to have more of it than not enough. But should you be working yourselves into a tizzy worrying that you might make a decision that nets you a few bucks less from your Social Security account than you might have received had you made a different choice? I sure am not. Let me explain.
My wife and I each took our Social Security benefits at age 62. I can hear financial planners and Social Security maximizing specialists gasping for air as they read that! After all, conventional money-making wisdom these days has it that the longer you delay the start of your Social Security benefits, the better off you will be. Most so-called “experts” will suggest delaying your benefits until age 70.
Well, my wife just turned 72. (She’s a few years older than I.) That means she’s been getting Social Security checks every month for about 10 years now. Let’s say she’s averaged getting $1,200 per month for the last 120 months. That’s $144,000 she has received between age 62 and 72. Had she waited until age 70 to start her benefits, she’d probably be due about $2,100 per month, or $900 more per month than she is getting now. That’s a decent chunk of change, no doubt. But it would take her 128 months, or about 11 years, to make up for the money she would have not received between 62 and 70. In other words, by age 81, she would have won the Social Security “game” had she waited until age 70 to start her Social Security.
My wife comes from a long line of women who’ve lived into their late 80s and early 90s. So chances are she will live well past age 81 and probably would have been better off to wait until age 70 to claim her monthly benefits. But here’s the deal: We don’t care! We have been having way too much fun these past 10 years spending her (and my) reduced Social Security checks. We’ve taken that $144,000 and traveled all around Europe. We have made many nice trips from one end of this country to the other. We’ve bought several new cars. I don’t want to imply that we are rich. We certainly are not.
But we feel rich in so many other ways. In addition to spending money, we also spend a lot of time riding our bikes around town or sitting on our back porch playing Scrabble. We purposely moved away from a part of the country many people consider a “paradise” just to be near our grandkids. We bounce them on our knees almost every day. What we are doing is living life to the fullest and not worrying one little whit about whether or not we made the right Social Security decision. “Stop worrying and start living” is the best advice I can give most of my readers.
And here is an illuminating story on this same subject. I bet many of you get all kinds of mail from financial planners to attend seminars about maximizing Social Security benefits. A while back, I decided to contact one of the local firms sponsoring such a seminar. I introduced myself and told them I’d be willing to participate in their meeting as a Social Security expert who could explain various Social Security rules, including the maximizing strategies. They eagerly accepted my offer. During the seminar, I gave the audience an overview of Social Security benefits and eligibility requirements. I then went over the maximizing strategies and noticed the financial planners in the back of the room salivating over the potential business from the folks in the crowd — helping them (for a fee, of course) make the “right” decision about when to take their Social Security.
But I finished my presentation with the same spiel I made in this column: that my wife and I took reduced Social Security benefits and have never regretted our decision and have been having the time of our lives in retirement. At the back of the room, one of the planners was trying to get my attention. He made a throat-cutting gesture with his finger signaling me to stop talking. He came up to the front of the room and quickly ushered me off the stage. I was never invited back!
So that was the gist of my 2012 column. Having said all that, I am not implying that you should ignore the advice of your financial planner. Assuming you and your wife will live into your mid-80s or beyond, you probably would be financially ahead to delay taking your Social Security benefits until 70. The point I made five years ago, and that I am making to you now, is that maybe it isn’t necessary to fret so much over maximizing your Social Security benefits. If you are tired of working, and if you can afford to retire at 62, do it! Maybe there is more to life than money.
