Breakeven Analysis of Starting Social Security Late

Social Security benefits can start to be received as early as age 62. However, delaying it will eventually prove more beneficial if one expects to live past their late 70s.

About 10,000 people retire every day and half of these do so before they turn 60. Age 65 is typically associated with retirement, and not surprisingly, 40% retire in their early 60s.Social Security benefits can be claimed as early as age 62. However, the benefits will be discounted from the levels of those retiring at their Full Retirement Age (FRA). FRA is 66 for those born before 1955 and has increased to 67 for those born after 1960. Maximum Social Security benefit at FRA is $3,011 in 2020. Benefits increase by 6-8% for every year someone delays, between the ages of 62 and 70, starting to receive their benefits.

So, what is the best age to begin receiving benefits? It is a kind of bet that we place on our own life expectancy. The breakeven analysis below shows that waiting to take benefits pays off if one lives past age 77. Interestingly, the breakeven point for all the starting ages of the benefit is at the ≈$0.5M cumulative benefit level.

The average life expectancy in the United States is 76 for males and 81 for females. Clearly, those who maintain good health have a better chance of coming out on the top, and they stand to gain the most by delaying Social Security benefits for as long as is possible. However, we have not factored in this analysis the economic conditions or other considerations that may force someone in good health to start taking benefits early. “Retirement Characteristics” outlines some of the personal and extraneous factors that affect your retirement planning.

A video presentation of this blog is available at “Breakeven Analysis of Starting Social Security Late.”

We specialize in tax-free retirement strategy and investments such as IUL, Annuity and LTC. Prefer a quick and complimentary consultation? Just email us at

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