Almost everyone tells you to wait until 67 or 70 to take your Social Security benefits. But what if that conventional wisdom is robbing you of financial freedom right now? After analyzing the numbers for my clients, I’ve discovered that taking Social Security early might actually put more money in your pocket over time.
The math doesn’t lie, and I want to share with you why this counterintuitive approach could work in your favor. This isn’t about getting rich quick—it’s about making smart decisions that give you control over your money and your life.
The Real Math Behind Early Social Security
Let me walk you through a real example from one of my clients who’s 61 years old. He asked whether he should take Social Security at 62 or wait until later.
Here’s what his numbers showed:
- At age 62: $2,228 per month ($26,736 annually)
- At age 67: $3,200 per month ($38,400 annually)
- At age 70: $4,000 per month ($48,000 annually)
At first glance, waiting until 70 seems like a no-brainer—it’s almost double the monthly income. But this ignores a crucial factor: the time value of money.
If my client takes that $2,228 monthly payment at 62 and invests it at just 9% (which is conservative for many alternative investments), after five years he’d have about $176,000. Earning 10% on that amount would generate $17,600 annually—or nearly $1,500 monthly.
Compare that to the $1,000 monthly increase he’d get by waiting those same five years. By taking control of his money early, he comes out $500 per month ahead!
The Long-Term Advantage Gets Even Better
What about waiting until 70? Running the same calculation over eight years, investing that early Social Security at 9% would grow to $324,000. At a 10% return, that generates $32,400 annually or about $2,700 monthly.
The increase from waiting until 70 would only be about $1,750 monthly. That’s nearly $1,000 less per month than what you could generate by taking it early and investing wisely!
Even if you simply spent the money instead of investing it, you’d collect about $214,000 over those eight years of early benefits. At the higher payment rate, it would take until age 80 just to break even on what you missed by waiting.
It’s About More Than Just Numbers
Beyond the math, there’s something even more valuable at stake: time. We don’t know how long we’ll live or what our health will be like at 70. What experiences and opportunities might you miss by delaying those benefits?
Dave Ramsey made a point I actually agree with: “I’m going to get my money as quick as I can and get it working harder than it’s working sitting over in the government.”
Where I disagree with Dave is his suggestion to put that money in the stock market. The next decade could be the worst time ever to invest there. Instead, consider secured real assets or alternative investments that can generate steady returns without the volatility.
Taking Control of Your Financial Future
The Social Security Administration’s cost-of-living adjustments consistently underestimate actual inflation. They manipulate these numbers to make the Social Security fund last longer. By taking control of your money earlier, you can potentially outpace these artificially low adjustments.
At 62, other options also open up, like reverse mortgages if you have a paid-off home. These can provide additional income streams that further enhance your financial flexibility.
The bottom line is this: all you can control is right now. You’ve already been told to delay gratification from your 20s to your 60s. Why delay it again into your 70s?
If you’re a wise steward of your money, taking Social Security early could allow you to create more memories, serve more people, and live life on your terms today—not someday in the future.
Don’t let the government decide when you can enjoy the benefits you’ve earned. Take control of your financial life now and make your money work harder for you than Social Security ever will.
Frequently Asked Questions
Q: Won’t I lose money overall if I take Social Security early?
Not necessarily. While your monthly payment will be lower, if you invest those early payments wisely in alternative investments earning 9-10% returns, you could generate more monthly income than if you had waited. The key is being a good steward of that money rather than simply spending it.
Q: Is Social Security guaranteed to be around when I retire?
I believe Social Security will exist for many years to come, though the benefits may change. However, the program consistently underestimates inflation in its cost-of-living adjustments, meaning your purchasing power decreases over time regardless of when you start taking benefits.
Q: What if I live well into my 90s? Wouldn’t waiting be better then?
The math shows that if you invest your early Social Security payments at reasonable returns (9-10%), you’ll still come out ahead even if you live into your 90s. Plus, you’ll have enjoyed those additional resources during your more active years in your 60s and early 70s when you might be better able to enjoy them.
Q: Where should I invest my early Social Security payments?
I recommend secured real assets or alternative investments rather than the stock market, which could face significant volatility in the coming decade. Many of my clients find success with real estate and other investments that provide steady returns without the ups and downs of equities. The goal is to find investments that generate reliable passive income with manageable risk.
