A perennial query that exists within the monetary literature and blogs is at what age is greatest to start Social Safety advantages. There are diametrically differing opinions on this subject. Two monetary bloggers whom I respect, Dr. Jim Dahle and Dave Ramsey, have opposing views on this problem; Jim states that one ought to wait till age 70,<\/a> and Dave says that it is best to start advantages at age 62. Primarily based on the arithmetic of the issue, who’s appropriate?<\/p>\n For my part, there are solely three absolutes concerning when to start Social Safety advantages:<\/p>\n Past these primary tenets, whether or not it’s mathematically useful to take Social Safety advantages earlier or later depends upon the assumptions that you simply make concerning inflation, taxes, and inventory market returns.<\/p>\n In its easiest kind, the profit equivalency between starting Social Safety advantages at 62 or 70 is represented by the next equation:<\/p>\n <\/p>\n Parity between starting Social Safety advantages at 62 or 70 is reached at age 80.39 years. That is mirrored within the desk beneath. (Observe that the quantity of PIA profit (the first insurance coverage quantity) is listed at $10,000 for simplicity\u2014the gross quantity doesn’t have an effect on the parity calculation.)<\/p>\n Nonetheless, this isn’t a good illustration of true parity. This calculation doesn’t consider the results of inflation, funding return on saved advantages, taxes on Social Safety advantages and funding returns, and the price of dying danger within the 62-70 age interval.<\/p>\n This is what we might see.<\/p>\n A 2.5% fee of inflation decreases the time to parity by two years to age 78. Observe that the ratio of advantages between 70 and 62 by no means modifications. However the absolute distinction between the 2 will increase accounts for why greater inflation favors delaying Social Safety advantages since they’re listed to the inflation fee. Subsequently, a basic precept concerning Social Safety advantages is that greater inflation favors delaying taking advantages. If you happen to assume a 5% inflation fee, the parity age decreases to 77, as mirrored within the desk beneath.<\/p>\n What does an individual who takes Social Safety early do with the advantages from 62 to 70? They both spend the cash or save the cash; nonetheless, presumably, the beneficiary is spending much less of the saved and invested retirement cash if they’re receiving and spending the Social Safety profit as an alternative.<\/p>\n As an illustration, if retirement bills are $120,000 per yr and you’ll obtain a $30,000 annual Social Safety profit at 62, the beneficiary can both withdraw $120,000 from financial savings annually or take Social Safety of $30,000 annually and withdraw $90,000 per yr from financial savings. The result’s that you’ll depart $30,000 extra in your funding accounts per yr if you happen to take the Social Safety profit.<\/p>\n Subsequently, when contemplating parity, we must always assume the advantages from 62 to 70 are being invested. What occurs to parity with a 2.5% inflation fee and once we add a modest funding return of seven% to advantages?<\/p>\n Parity just isn’t achieved till age 87. That is past the life expectancy of most individuals. If we assume a ten% return (see the desk beneath), which is what Dave Ramsey assumes in his recommendation, parity is rarely reached. Because of this he advises starting advantages at 62. So, one other precept is that if you happen to assume the next fee of market return in your financial savings, it’s extra useful to take Social Safety early.<\/p>\n However this projection just isn’t truthful both. Social Safety advantages and cash saved in a facet account could also be topic to taxation. Social Safety is all the time thought of atypical revenue, and for many WCIers, 85% of the profit can be taxed. The facet account taxation is much more sophisticated, as it could be atypical revenue, capital achieve revenue, or a mix of the 2. It might be tax-free revenue in a Roth<\/a> or tax-deferred revenue in a daily IRA that you simply didn\u2019t must spend since you have been getting Social Safety advantages. It might be cash invested in an index fund<\/a> that has minimal capital achieve distributions and dividend distributions which may be taxed at a 0% fee.<\/p>\n Let\u2019s assume a marginal tax fee of twenty-two% and a median earnings tax fee of 20%.<\/p>\n The upper the tax fee on earnings, the shorter the time that’s required to realize parity. On this case, parity is achieved at age 84 as an alternative of 87. Not surprisingly, the next fee of taxation in your financial savings favors taking Social Safety later moderately than earlier.<\/p>\n Extra data right here:<\/b><\/p>\n To realize true parity, nonetheless, we should additionally take into account the mortality danger\u2014the danger that the one who delays Social Safety advantages to 70 will die earlier than reaching parity. As an illustration, if the beneficiary within the above chart died at 63, they might have misplaced $5,850 in after-tax advantages. That distinction is the mortality danger, and it will increase yearly till at the least age 70. This precept is true even when contemplating survivor advantages, which we are going to focus on later.<\/p>\n The maths, admittedly, will get fuzzy at this level as I’m not an actuary. So, I went on-line and acquired quotes for 15-year time period life insurance coverage from New York Life. The quote was a 10-year time period life for a 62-year-old non-smoking, in any other case wholesome male. (Getting this quote was fairly a sacrifice, as I’m now being inundated with emails and cellphone calls from brokers attempting to promote me life insurance coverage.)<\/p>\n I took the annual premiums quoted for $100,000, annualized them, and prorated the quantity to mirror the after-tax profit distinction in lieu of the total $100,000 profit. That quantity is roughly what it could value to insure for the lack of the profit distinction previous to age 70 within the occasion of a untimely dying.<\/p>\n that quantity within the far proper column, parity just isn’t achieved till age 86. If we select so as to add a modest funding return of 5% to that quantity (cash that may not must be spent to realize true parity and could possibly be in any other case invested), then parity would come even later at age 87.<\/p>\n Most often, a lower-earning partner is entitled to Social Safety spousal advantages. You will need to keep in mind that a lower-earning partner can declare the upper of both his\/her private profit or 50% of the good thing about the higher-earning partner at his\/her full retirement age. However they cannot declare each. The spousal profit could be requested provided that the higher-earning partner has utilized for Social Safety advantages. As with a higher-earning partner\u2019s Social Safety advantages, the quantity of profit for a lower-earning partner depends upon the age of the lower-earning partner on the time advantages start.<\/p>\n You will need to keep in mind that the quantity of spousal profit just isn’t affected by the age at which the higher-earning partner elects to start out advantages. As well as, the lower-earning partner doesn’t obtain any extra quantity for delaying advantages past their FRA. Lastly, it is very important keep in mind that the lower-earning partner can obtain the upper of fifty% of the higher-earning partner\u2019s FRA quantity or their very own Social Safety profit, however they can not obtain each.<\/p>\n The calculation for parity on this situation can be represented by the next components:<\/p>\n On this case, parity between starting spousal advantages at 62 vs. 67 can be achieved at roughly age 76. That is sooner than parity for the higher-earning partner, which favors delaying advantages till age 67. As with the opposite projection, greater inflation favors delaying advantages, and better market funding returns favor taking advantages early.<\/p>\n If the lower-earning partner has accrued a Social Safety profit that’s larger than 50% of the FRA advantage of the higher-earning partner, then every partner would obtain their very own profit, and the spousal advantages wouldn’t play a job of their decision-making.<\/p>\n One other consideration when deciding on when to take Social Safety advantages is whether or not you’ve got youngsters who’re youthful than 20 years previous. Minor youngsters could also be eligible for dependent care Social Safety advantages if both partner has filed for his or her Social Safety advantages. The quantity is often 50% of the submitting partner\u2019s Social Safety profit at FRA (topic to a household most relying on the variety of youngsters). This generally is a vital profit, and it ought to be thought of once you make your determination.<\/p>\n Extra data right here:<\/b><\/p>\n If the higher-earning partner passes away, the lower-earning partner can be entitled to assert a survivor\u2019s profit. As with spousal advantages, the quantity of profit depends upon the age at which the lower-earning partner begins their advantages. As well as, the lower-earning partner can take both the survivor profit or their very own profit, however not each. In contrast to a spousal profit, nonetheless, the quantity of a survivor\u2019s profit relies on the full advantage of the higher-earning partner. Subsequently, if the higher-earning partner delays advantages till age 70, the survivor\u2019s profit shall be based mostly on that elevated quantity.<\/p>\n A surviving partner might start a profit at age 60 at 71.5%. In the event that they wait till FRA, the profit is 100% of the deceased partner\u2019s profit. Parity, with out contemplating the results of market return or inflation, can be achieved at roughly age 84.<\/p>\n Clearly, the dying of a partner is a traumatic expertise, and your choices will doubtless not be dictated solely by the projected Social Safety advantages.<\/p>\n The sensible impact of the survivor\u2019s profit is to increase the higher-earning partner\u2019s advantages till each married companions go away. This prolongs the period of time that they’ve to realize parity in Social Safety advantages in the event that they delay starting Social Safety till age 70.<\/p>\n One technique on this regard is for the lower-earning partner to start advantages at 62 and the higher-earning partner to start advantages at 70. Nonetheless, the identical parity calculations would apply to the higher-earning partner\u2014the one distinction can be the prolonged time since each companions must go away earlier than the profit would terminate (except the lower-earning partner is beneath FRA when survivor\u2019s advantages start).<\/p>\n For the needs of the spousal and survivor\u2019s advantages, I’ve assumed {that a} couple\u2019s earnings histories are disparate (higher-earning partner and lower-earning partner) and that the people have been born after 1960. When the earnings histories are comparable, the worth of the spousal and survivor\u2019s advantages decreases considerably.<\/p>\n Ultimately, was Dave Ramsey or Jim Dahle proper concerning when to start Social Safety? In brief, they’re each proper, relying on what assumptions you select to make.<\/p>\n It’s troublesome to foretell the longer term, and there are dozens of permutations doable with this mannequin. There are additionally many nuances with respect to Social Safety advantages (incapacity, disabled baby, divorce, and so forth.) which I’ve not addressed within the title of brevity. I hope that I’ve given you some perception into the fundamental ideas of Social Safety so that you could develop an innate understanding once you meet along with your monetary advisor. I’ve hooked up the spreadsheet for you<\/a> to find out what assumptions you wish to make. You possibly can enter your assumptions for inflation, market return, and so forth., and the spreadsheet will mechanically spotlight the place parity happens.<\/p>\n For me, the selection that I made was to take Social Safety advantages on the time that I retired at age 64. My spouse, born in 1957, was 66 1\/2 years previous and obtained 50% of my profit. (She had began her private profit at 62, and after I retired, she switched to her spousal profit at 66 1\/2.) I don’t remorse making this determination.<\/p>\n \u00a0<\/p>\n Each WCIer might have completely different wants and should make completely different assumptions concerning inflation, taxes, funding returns, and mortality danger. I hope that you simply discover this mannequin helpful to your planning.<\/p>\n Please word that this spreadsheet<\/a> is for illustration of a single particular person and doesn’t consider doable choices for married {couples}. Please seek the advice of your monetary advisor earlier than making any choices concerning when to start your Social Safety advantages.\u00a0The spreadsheet is locked, however you’ll be able to view the formulation used within the calculations. I attempted to be conscientious after I wrote it, however please be at liberty to let me know if you happen to discover any errors.<\/p>\n [FOUNDER’S NOTE BY DR. JIM DAHLE: There are few absolutes when it comes to claiming Social Security, but it’s key to understand what they are. The first is that the wealthier you are, the less this matters. If you’re retiring with $8 million, it just doesn’t matter if you take your Social Security at 62 or 70. This is an optimizer\/satisficer thing. Poor people are the folks who would really benefit from delaying Social Security. Unfortunately, they are the ones least likely to be able and willing to do so. Just having the ability to delay Social Security to 70 (i.e., having something else to live on or perhaps still being able to work) is a sign of privilege.\u00a0<\/em><\/p>\n The second absolute is that delaying Social Security is the best annuity available on the market and probably the best fixed-income investment possible. So, if you’re buying a SPIA and NOT delaying Social Security, you’re making a mistake. And the more bonds, CDs, and cash you have in your portfolio, the better off you are spending it in order to delay your Social Security payments.\u00a0<\/em><\/p>\n The third absolute is that the longer you live, the better off you are delaying Social Security. That’s how the math works, but most importantly, that’s how the insurance aspect works. If you die in a couple of years, well, that’s a bummer, but you didn’t get close to running out of money. If you live to be 108, I guarantee you’ll be glad you delayed your Social Security. Delaying Social Security is like buying longevity insurance. It pays out if you live a long time, and if you don’t, you didn’t need it anyway. Think of delaying Social Security like buying a Single Premium Immediate Annuity, where the longer you live, the more you’re paid. Interestingly, annuity buyers live longer than those who don’t buy them, and I bet Social Security delayers live longer, too. Correlation is not causation, but it’s something to think about. That insurance aspect of Social Security has value, more value than the absolute dollars and cents that a calculation would spit out. You might come out ahead investing, but the guarantee has value. It’s a bit like whole life insurance that way. Yes, your rate of return is lousy . . . unless you die at 40, and a few life insurance purchasers will. Racecar driver Kyle Busch successfully sued insurance companies for selling him some lousy permanent life insurance policies, but then he died at 41. Maybe his heirs would have come out ahead if he had spent more of his money on life insurance, not less. (Naturally, they would have come out much further ahead if he had spent the same amount of money on big fat, term life policies instead of IULs, which was the reason for the lawsuits).\u00a0<\/em><\/p>\n So yes, the rule of thumb is that, assuming good health, single people and the higher earner in a couple should delay Social Security until 70. But rules of thumb have exceptions, and only you can decide if you are one. Frankly, I hope most WCIers build so much wealth that this question ends up on their \u201cdoesn’t matter\u201d list.<\/em><\/p>\n If you want to get beyond rules of thumb, I would suggest you spend some time with Mike Piper on this subject. He wrote Social Security Made Simple<\/a> and designed the free Open Social Security<\/a> software. If you run your numbers through there and it tells you to claim at 67 (or whatever) instead of 70, then I think it’s fine to do so. But when I run our numbers through there, I get the expected recommendation that Katie should file at 62 and I should wait until 70. I bet you will, too. Doing that will take you a whole lot less time than trying to DIY the calculations, and I’m confident Mike has spent a whole lot more time on this subject than any of the rest of us.]<\/em><\/p>\n What do you suppose? At what age do you intend to start Social Safety advantages? Is ready so long as doable one of the best technique?\u00a0<\/strong><\/p>\n<\/p><\/div>\n\n
What Concerning the Math?<\/h2>\n
![\"social](\"https:\/\/www.whitecoatinvestor.com\/wp-content\/uploads\/2026\/05\/social-security-calendar-750-chart.jpg\")
<\/a><\/p>\nWhat If We Add Inflation of two.5%?<\/h3>\n
![\"\"](\"https:\/\/www.whitecoatinvestor.com\/wp-content\/uploads\/2026\/05\/social-security-calendar-inflation-750-chart.jpg\")
<\/a><\/p>\n![\"social](\"https:\/\/www.whitecoatinvestor.com\/wp-content\/uploads\/2026\/05\/social-security-calendar-inflation-5-750-chart.jpg\")
<\/a><\/p>\nWhat If We Add an Funding Account for the Advantages?<\/h3>\n
![\"\"](\"https:\/\/www.whitecoatinvestor.com\/wp-content\/uploads\/2026\/05\/social-security-calendar-investment-return-750-chart.jpg\")
<\/a><\/p>\n![\"social](\"https:\/\/www.whitecoatinvestor.com\/wp-content\/uploads\/2026\/05\/social-security-calendar-investment-return-10-750-chart.jpg\")
<\/a><\/p>\nWhat If We Add Taxation?<\/h3>\n
![\"social](\"https:\/\/www.whitecoatinvestor.com\/wp-content\/uploads\/2026\/05\/social-security-calendar-chart-tax-rate-750.jpg\")
<\/a><\/p>\nMortality Threat?<\/h2>\n
![\"life](\"https:\/\/www.whitecoatinvestor.com\/wp-content\/uploads\/2026\/05\/life-insurance-rates-chart.jpg\")
<\/p>\n![\"social](\"https:\/\/www.whitecoatinvestor.com\/wp-content\/uploads\/2026\/05\/social-security-calendar-insurance-750-chart.jpg\")
<\/a><\/p>\nSpousal Advantages<\/h2>\n
![\"social](\"https:\/\/www.whitecoatinvestor.com\/wp-content\/uploads\/2026\/05\/social-security-higher-earning-spouse-img.jpg\")
<\/p>\nDependent Advantages<\/h2>\n
Survivor Advantages<\/h2>\n
![\"social](\"https:\/\/www.whitecoatinvestor.com\/wp-content\/uploads\/2026\/05\/social-security-equation-survivor-benefit-img.jpg\")
<\/p>\nWho Was Proper?<\/h2>\n