Good things come to those who wait to retire


All we did was fiddle with a spreadsheet of retirement income and expenses and see what happened if I delayed starting Social Security benefits until age 70 rather than my full retirement age of 66.

We were curious after reading “Beyond Conventional Wisdom: New Strategies for Lifetime Income,” a report by the new Fidelity Research Institute. Among its major findings, the report suggests many Americans may be limiting total lifetime income by drawing on Social Security too early, when benefits are smaller. In fact, the most common age for starting retirement benefits is 62, the earliest possible.

“One thing we didn’t specifically put in the report is that, beginning at age 62, the benefit goes up each year even if you stop working,” said W. Van Harlow, the Institute’s managing director of research. Tables in the report, available at, make this obvious. Provided you’ve worked at least 35 years - only the 35 highest-earnings years count in the benefits formula - delaying benefits rather than continuing to work accounts for the lion’s share of the increase.

“Most people don’t understand and think they have to continue working” to receive a higher benefit, said Steven Feinschreiber, vice president of research for the institute.

For example, the projected annual benefit of a 55-year-old earning $75,000 a year would be $15,888 at age 62 if he retired then; $21,768 at 66 if he worked until then, and only a tad less or $21,181 if he quit work at 62 but waited to collect until 66.

That’s an increase of about 8 percent a year just for waiting. For people born in 1943 and later, benefits if they wait go up exactly 8 percent a year after full retirement age until age 70.

“Earning 8 percent a year with certainty is a hard thing to do with an investment,” Harlow said, but you can do it with your Social Security benefits by waiting.

In our case, my higher benefit amount at age 70 would, after 13 years, more than make up for the delay in starting them. In addition, Georgina, who plans to start taking benefits at age 66 on her own record, would receive an additional spousal benefit when I turn 70, based on my record. Her combined benefit would add up to half of mine, based on information given us by the Social Security Administration.

The result: Rather than likely running out of money at age 100 as we had projected earlier, we would enjoy an additional three to four years of the same inflation-adjusted income. Since we don’t plan on living to 104, this actually means we can afford to spend a bit more than we planned each year, or pass on more to our heirs.

To be sure, we are not saying that delaying taking Social Security benefits is always the best move. The decision of when to start benefits, from reduced benefits as early as age 62 to enhanced benefits at age 70 or anywhere in between, depends on numerous factors, including your need for immediate income and how long you expect to live. But delaying benefits can be a worthwhile strategy many retirees don’t even consider.

Humberto and Georgina Cruz are a husband-and-wife writing team who work together in this column. Send questions and comments to or