There’s one very good reason to wait as long as you can, particularly if you’re going to have to rely upon Social Security to finance a fair portion of your basic lifestyle. Of course, that usually means working longer.
The reason is that Social Security payments are, at least to an extent, inflation protected. While that doesn’t matter much if inflation continues at 2-4%, it could matter a great deal if inflation starts running 8-10% for several years running.
Most retirees invest their other financial assets relatively conservatively and those assets won’t rise with inflation (although they might earn higher interest), so Social Security could be the one asset that keeps you from having to reduce your standard of living significantly following an extended inflationary period.
It’s either that or invest in riskier assets like real estate, common stocks, and precious metals, all of which should end up higher following an inflation binge.
So, if at 62 Social Security is already a significant part of your retirement income, be aware that it could be most of your income after an inflation binge and that the rest of your assets probably won’t have kept pace.
The main arguments for taking it early are: 1) you’re in poor health and are either unable to work, or likely to not live long, or both, or 2) you’re male...we just don’t seem to make it out of the 70’s that often, and it’s in the 80’s and 90’s that this would be likely to be most important.
That 8% increase in benefits every year is significant, but you have to live a long time to make up waiting until 70 to start collecting. As I said though, it’s the one financial asset that is most likely to have a decent inflation factor built into it, so if you don’t need it, or can work a bit longer even part time to sustain your living standard without collecting SS, I’d consider it if you’re healthy and expect to live for years in retirement.
And face it, if you work longer and don’t collect and then die at 66, missing four years of SS payments is the least of your worries. If you hate your job, that’s also a consideration, of course.
I made a lot of bucks and invested wisely. SS is about 45% of my income due to the fact that I limit the withdrawals from my accounts to preserve and even grow capital.
I have no debt and have a US median income, you have to plan and adjust that plan yearly.
“While that doesn’t matter much if inflation continues at 2-4%...”
HA. You don’t shop much, do you? LOL