I was having a few beers the other day with my friend Tom. His 62nd birthday was coming up, and he hit me with a plan he was pretty proud of. He told me he’d picked it up from “a bunch of experts.”
Take Social Security at 62, he said. Invest every check. End up richer than if he’d waited until 70.
On paper, it sounds clever. Grab the money early, let the market do its thing, laugh all the way to the bank.
Here’s the problem. I’ve been a CPA since 1981, and I spent a decade as a Wall Street investment advisor. I’ve heard this pitch before.
So I did what I always do. I ran the numbers. Then I handed Tom seven reasons his experts are wrong.
1. You’d have to beat a guaranteed 8% — and that’s the easy part
Wait from 62 to 70 and Tom’s check grows about 77% — and the final three years alone tack on a guaranteed 8% apiece, courtesy of the government. That’s according to the Social Security Administration.
That 8% is the hurdle his investments have to clear in those years. Risk-free.
Now, 8% doesn’t sound impossible. The stock market has beaten it over long stretches.
But Social Security’s version is guaranteed. Go try to find a risk-free 8% anywhere else on Earth. I’ll wait.
2. You’d be swapping a sure thing for a maybe
The 8% boost is backed by the federal government. It adjusts for inflation every year. And it can’t drop in value when the market tanks.
Tom’s investments can do all three of those things — in reverse.
Say he claims at 62, starts investing, and 2008 shows up again. Or 2022. A bad stretch early on can gut the whole plan.
You’re comparing a guaranteed, inflation-proof, lifetime income stream to a brokerage account that can lose a third of its value in a year. That’s not apples to oranges. That’s apples to hand grenades.
3. Taxes take a bite out of both ends
Here’s the part the experts always skip. Every dividend and capital gain on the money Tom invests is taxable — the IRS counts both as income.
Meanwhile, that extra income can drag more of his Social Security into the taxable column. Depending on his combined income, up to 85% of his benefit can get taxed.
So the “invest it” plan gets squeezed twice: once on the investment gains, and again on the benefits themselves. There are ways to trim the tax bite on your benefits, but waiting for the bigger check sidesteps a chunk of it automatically.
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4. The plan only works if you actually invest the money
This one’s the killer. The whole strategy assumes iron discipline.
Claim at 62. Invest every check. Never skim a little for a vacation. Never panic-sell when the market drops. Do it flawlessly for years.
Be honest — how many people pull that off? The checks show up, life happens, and the money gets spent.
The 8% delayed credit doesn’t ask for willpower. It happens automatically whether you’re disciplined or not. That’s a feature, not a bug.
5. The bigger check is longevity insurance — and it protects your spouse
The real value of waiting isn’t beating the market. It’s protecting you against the one risk you can’t invest your way out of: living a long time.
According to the SSA, the average 65-year-old man today will live to about 84, and the average woman to about 87. Plenty of people go well past that.
A portfolio can run dry. That bigger Social Security check can’t — it’s guaranteed for life, and it keeps climbing with inflation.
There’s a spouse angle too. Tom got married to a wonderful woman less than a year ago. (Truth be told, I think I like her more than him.)
If Tom’s the higher earner, the check he locks in becomes his wife’s survivor benefit. Claim early, and the early claim can cost a surviving spouse six figures over a long widowhood.
6. If Tom keeps working, the government grabs the checks anyway
Tom’s still working. That blows a hole in the plan he didn’t see coming.
Claim before your full retirement age and keep earning, and the SSA withholds $1 in benefits for every $2 you earn above a limit. For 2026, that limit is $24,480.
Earn a decent salary, and the very checks Tom wants to invest may not even show up. You get the money back later in bigger checks — but so much for feeding the brokerage account now.
7. ‘Grab it before it’s gone’ is the worst reason of the bunch
Here’s something I heard from Tom, and plenty of other people: He’s not convinced Social Security will even be there if he waits, so he figures he’d better grab what he can while he can.
I understand the worry. But panic-claiming is a mistake, and the math shows why.
Start with the fear itself. The program’s trustees project the retirement trust fund won’t run short until around 2032 — and even then, payroll taxes coming in would still cover about 78% of scheduled benefits. That’s a trim, not a shutoff.
Now the part that matters. If Congress ever cuts benefits across the board, claiming early doesn’t save Tom. There’s no edge in grabbing it early if the cut hits everyone.
He’d just lock in a smaller check and eat the same percentage cut on top of it. That’s a double hit, not a hedge.
So the fear cuts the other way. If anything, it’s an argument for a bigger base — not a smaller one.
So when does claiming early make sense?
I’m not saying grabbing Social Security at 62 is always dumb. It isn’t.
If you need the money to live, take it. If your health is poor or your family doesn’t tend toward long lives, take it — there’s no medal for waiting until 70 and then collecting two checks before you’re gone.
The system is built so that, if you live an average lifespan, you collect roughly the same either way. The tradeoffs at 62, 67, and 70 come down to your health, your savings, and your spouse.
What doesn’t hold up is Tom’s reason. “I’ll out-invest Social Security” isn’t a strategy. It’s a bet that you’ll beat a guaranteed, tax-advantaged, inflation-proof, survivor-protected return with risky money you have to remember not to spend.
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