Senior Planet recently featured David A. Schneider, CFP®, founder of Schneider Wealth Strategies, in its article “2026 Social Security Update.” The article examines how recent changes in the retirement landscape are affecting Social Security planning and why there is no single claiming strategy that works for everyone.
Addressing the conventional wisdom that retirees should wait until age 70 to claim benefits, Mr. Schneider explained:
“Sometimes it’s not about identifying the perfect claiming strategy. None of us are going to know what the perfect claiming strategy is in advance because we don’t know how long we’re going to live.”
Life expectancy is an important part of that calculation. Mr. Schneider noted:
“If you have a short life expectancy, waiting till 70 may not make sense. The break-even age for delaying from full retirement age to age 70 is typically somewhere in the early 80s. So, if someone has a health condition or family history that makes living past their late 70s unlikely, then claiming early may mean more lifetime dollars, and waiting may not make sense.”
Financial circumstances can also make delaying inappropriate:
“If you need the money, particularly if you are single and you don’t have a surviving spouse to worry about protecting with a larger survivor benefit, then it may make sense just to claim. If delaying means spending your last dollar or worse, racking up debt, it makes no sense to wait.”
The article also considers whether someone should claim Social Security early and invest the proceeds. Mr. Schneider cautioned against relying on that approach:
“That’s not a good strategy. I don’t think that people are going to be so easily able to beat that (annual growth) plus inflation that Social Security offers. Remember, Social Security is the only government guaranteed inflation protected source of income any of us will ever be offered.”
Finally, Mr. Schneider emphasized the importance of evaluating different claiming strategies in the context of an individual's overall financial circumstances:
“Don’t try to figure it out by yourself. It is best to sit down with a qualified financial advisor who can model a wide variety of scenarios tailored to your specific situation. Sometimes it’s not about identifying the perfect claiming strategy because none of us are going to know what the perfect claiming strategy is in advance because we don’t know how we’re going to live, how long we’re going to live. But it’s more about eliminating strategies that probably don’t make sense based upon the available facts they have about a client.”
The article underscores that Social Security claiming decisions depend on factors including life expectancy, continued employment, income needs, survivor benefits and taxes. Rather than relying on a universal claiming age, retirees should consider how those factors interact with their individual circumstances.
