Don’t Let a Bigger Social Security Check Cost You a Better Retirement
Why maximizing benefits isn’t always the same as maximizing retirement
One of the questions we get almost every day is “When should I start taking Social Security?” The answer most advisors blurt out is “Wait until age 70. That is when you will receive the largest benefit.” While that advice may make sense mathematically, we at Redfish Capital do not believe that advice should be a blanket answer.
The better question may be:
“What claiming strategy helps me live the retirement I want while maintaining financial security?”
The Conventional Wisdom: Delay and Receive More
For every year you delay Social Security beyond your Full Retirement Age; your benefit generally increases until age 70. This creates a compelling argument for waiting. After all, who would not want more guaranteed income?
For some retirees, delaying is absolutely the right decision, particularly those who:
Have a family history of longevity
Have significant retirement savings
Want to maximize survivor benefits for a spouse
Do not need the income immediately
In these situations, waiting may create meaningful long-term value. But retirement planning is not one-size-fits-all.
Retirement Only Happens Once
Financial planning often focuses heavily on numbers: income projections, break-even analyses, life expectancy calculations, and portfolio withdrawal rates. Math matters! But your retirement is not lived out on our various spreadsheets.
What we have seen through our decades of watching people retire and live our their lives is that most people experience their retirement years in phases.
The Early Years
When people first retire, we have found that most have a bucket list. I get it. There are things I want to go and do as well. Typically, from your early 60s through your early 70s, these years are often characterized by:
Travel and family experiences
Golf, fishing, and other hobbies
Volunteer work
Bucket-list adventures
This is when retirees are generally healthiest and most active...and spend more money.
The Middle Years
Activity levels begin to decline. Travel is becoming less frequent. People tend to have a routine at this phase. They are in the steady years of spending. Generally, it is a little less than the early years
The Last Years
Health concerns often become the primary focus. Mobility decreases and discretionary spending frequently declines. Ironically, many retirees spend the years they are healthiest and most active waiting for a larger Social Security check.
The Question Most Calculators Never Ask
Most online Social Security calculators are built around one goal which is How can I maximize lifetime benefits? We think this question should be rephrased to How do I maximize my enjoyment of retirement?
Retiree A: Claims Earlier
Uses the income to travel with family, take dream vacations, spend time with grandchildren, and create meaningful experiences.
Retiree B: Delays Until 70
Lives more conservatively for several years in exchange for a larger future benefit. At age 70, the monthly check is significantly larger.
Who made the better decision? The answer depends entirely on what each person values. Retirement should not be judged solely by the size of a Social Security check. It should be judged by the quality of life it helps create.
Money Is a Tool, Not a Trophy
Many retirees spend decades accumulating wealth. They become excellent savers. Then retirement arrives, and they struggle to switch from saving money to using money.
As advisors, we have seen retirees with substantial portfolios hesitate to travel, help family members, or enjoy retirement because they are worried about spending too much. The result is that they continue acting like accumulators even after they have won the game.
Sometimes Social Security is not simply an income decision. It is a permission slip. A reliable monthly benefit can provide retirees with the confidence to enjoy their lives rather than constantly worrying about preserving every dollar.
Social Security Does Not Exist in a Vacuum
One of the biggest mistakes retirees make is evaluating Social Security independently from the rest of their financial plan.
Household 1
$300,000 in retirement assets
Relies heavily on Social Security income
Waiting may be difficult because income is needed sooner.
Household 2
$3 million in retirement assets
Strong cash reserves
Minimal debt
Waiting until age 70 may be manageable. However, even in affluent households, waiting is not automatically the best answer. The question becomes: Are we improving retirement, or simply increasing a future payment?
Married Couples Face Additional Considerations
For married couples, the decision becomes even more important. When one spouse passes away, the surviving spouse generally keeps the larger of the two benefits. Because of this, delaying benefits for the higher-income spouse can often provide valuable survivor protection.
That can be a compelling reason to wait. However, the same principle still applies: the strategy should support the lifestyle goals of both spouses, not simply maximize a future benefit calculation.
What We Tell Clients
When clients ask us whether they should claim at 62, Full Retirement Age, or 70, we rarely begin with calculators. Instead, we begin with questions:
What does your ideal retirement look like?
How important is travel?
What experiences matter most?
How is your health?
What other income sources are available?
What are your goals for family and legacy?
What would make retirement more enjoyable today?
Only then do we evaluate claiming strategies. Because Social Security should support your life plan. Your life plan should not revolve around your Social Security strategy.
The Goal Is Not a Bigger Check
The real goal is not maximizing Social Security. The goal is maximizing retirement.
For some people, that means delaying until age 70. For others, it means claiming earlier and enjoying additional income during the years when they can make the most of it. Neither approach is universally right.
The best decision balances:
Financial security
Lifestyle goals
Health considerations
Family circumstances
Personal values
A successful retirement is not measured by the size of your Social Security benefit. It is measured by how well your resources help you live the life you have worked so hard to create.
Final Thoughts
One day you will receive your last Social Security check. The question is not whether you maximized that benefit. The question is whether you maximized your retirement.
Because the greatest retirement risk may not be running out of money. For many people, it is reaching the end of life with unused opportunities, postponed dreams, and experiences that were continuously delayed in pursuit of a larger future payment.
Redfish Capital Management, LLC is registered as an investment adviser with the State of Texas and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. Registration as an investment adviser does not constitute an endorsement of the firm by the SEC, nor does it indicate that the adviser has attained a particular level of skill or ability. The content presented is developed from sources believed to be accurate and should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author and are subject to change. The information in this material is not intended as tax or legal advice. A legal or tax professional should be consulted for specific information regarding your individual situation. The material presented is for general informational purposes only and does not constitute the rendering of personalized investment advice. Past performance may not be indicative of future results. All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's portfolio. Content should not be construed as an offer to buy or sell, or a solicitation of any offer to buy or sell any of the securities mentioned.
