Delaying Social Security is a Scam
Take what you can — give nothing back
One of my family’s all-time favorite film series is Pirates of the Caribbean movies starring Johnny Depp as Captain Jack Sparrow.
One of the many great lines from the films repeated often is…
Which summarizes my own plan when it comes to collecting social security.
Sure, I realize that may be an easy thing to write at the age of fifty-two, but IF, IF, and IF, I’m certain that I will feel the same way and, more importantly, take action and begin collecting something that I have already contributed to for thirty years should I remain among the living ten years from now.
For many of us, delaying social security doesn’t make sense.
Let’s consider who it might make sense for:
- If you are extraordinarily healthy AND have a family history of long life expectancy, it might be worth rolling the dice.
- If you plan to work anyway for reasons other than financial. You, of course, should just let it roll.
- Social security isn’t going to represent a significant portion of your retirement income.
Everyone else should claim as soon as possible and feel good about their decision.
Why?
Your payment is adjusted based on the mortality tables.
It is therefore designed to pay you the same amount of money, just spread over your remaining life expectancy.
So by delaying, all you are doing is continuing to live below your means in retirement, so that you have more money when you are even older and less likely to need it.
Unless you are fairly positive you are going to live a longer life than most people, your payout will be the same or less by delaying.
None of us is guaranteed tomorrow. Even if you are in peak condition, you could have an undiscovered aneurysm. You could develop cancer. You could die in an auto accident. If you are an American, there’s a decent chance that you will perish in a mass shooting. If you delay social security and die before receiving any payback, you’ve blown it.
But the government and retirement planners want to see you wait.
Why?
If you die before claiming benefits, you reduce the strain on the Social Security system.
The government is only too happy for you to die early. They may not be rooting for your death (depending on who in government we’re talking about) but they certainly won’t shed any tears about it either. The government is disincentivized to promote long life expectancies under the current system.
Retirement planners want you to wait also. By waiting you need to accumulate more assets to fund your retirement until you collect. That means more fees for them.
The purpose of life is not to maximize financial accumulation.
The purpose of life is to enjoy it.
Your goal should be to accumulate enough to enjoy a comfortable retirement, and hopefully spend your last dollar on the day you die.
Die with zero.
If you like this story or if it even makes you think a little bit about the topic, I wrote one about how you or I might die broke, which is not such a horrible thing.
