We’ve all heard the advice: “Wait until you’re 70 to claim Social Security so you can get the biggest check possible every month.” Tim F., a retired health care worker from Arizona, followed this advice to heart. But now, at 75, he’s having second thoughts.
Let’s find out: I’m retired, but I regret my frugal retirement — here’s why
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GOBankingRates spoke with Tim to understand why he should have applied for benefits sooner. His insights may change the way you think about your own retirement planning.
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The waiting game: Not everything is over
Tim thought he was doing everything right.
“Every book you read says you should wait until you’re 70 if possible,” he said. “I think I thought, ‘I can do it, so I should do it.’ I never stopped to think about whether it was really the best plan for me.”
Tim likes the big monthly check, but isn’t sure if it’s worth the money.
“Looking back, when I still had a wife, I would have wanted more money.”
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Broken heart that no one talks about
Tim’s wife, Sarah, died at the age of 68 before they could claim benefits.
“Sarah and I had a plan,” Tim said. “We were definitely thinking long-term, but I think we should have been more realistic about how much time we had left.”
Tim isn’t sure what advice to take away from this, other than to live for today (and make sure to go to the doctor regularly).
when your body has other plans
Tim said he hadn’t given much thought to how his health would change as he got older.
“I’m not as active as I was in my 30s, or even in my 40s,” he said. “As you get older, a year can be a big change in your health. You may wish you had taken the money sooner and spent some of it on travel and some of it in a high-interest savings account. The result is 20/20!”
“Break-even point”: a moving target
Financial advisors talk about the “break-even point.” This is the age at which the total benefit from waiting exceeds the benefit from previously claiming.
“I was told that I would break even at about age 82,” Tim says. “But when you’re 75, 82 seems so far away. I wish I had thought more about enjoying the present instead of always planning for the future.”
missed investment opportunity
Tim didn’t consider the possibility of investing some of his Social Security income if he had claimed it earlier.
“I’m not an investment guru,” Tim said. “But I could have put that money in a high-interest savings account and made it work. I have no choice.”
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Hidden cost: stress
Perhaps the biggest impact for Tim wasn’t financial, but the stress of waiting.
“In the years leading up to my 70th birthday, I was constantly rethinking myself,” he said. “Should I claim it now? Are we making a big mistake? I’ve driven myself and everyone around me a little crazy.”
Tim’s words of wisdom
Tim doesn’t believe that waiting until age 70 is wrong for anyone. But he has some advice for those making this decision:
1. Think about your health. “Be realistic about how you will feel in five years.”
2. Talk to your loved ones. It’s not a good decision unless we make it together.
3. Think about what you want to do after you retire. trip? Do you spend time with your grandchildren? Would you like to start knitting? Make a list and keep track of your finances.
4. Look to other sources of income. Your side job doesn’t have to end when you retire.
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This article originally appeared on GOBankingRates.com: I regret retiring and claiming Social Security at age 70 — here’s why
