Listener Questions: Should I Take Social Security Early and Invest It?
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In this episode of 'Retirement Answer Man,' host Roger Whitney addresses listener questions on Social Security timing, inheritance planning, and retirement strategy, while sharing inspiring stories of retirees living authentically. The episode opens with two 'rocking retirement in the wild' stories: one from Steve, who finds deep joy in the freedom to do nothing and explore his creativity post-retirement, and another from a Navy veteran fulfilling a lifelong dream of taking the world’s longest nonstop flight. These stories underscore the importance of personal meaning over societal expectations. The core discussion centers on whether to take Social Security early and invest it, with Roger analyzing the trade-offs between maximizing returns through investment and the long-term security of delayed, inflation-adjusted benefits. He emphasizes the risks of execution, market volatility, and health uncertainty, advocating for simplicity and guaranteed income. Additional topics include using a backdoor Roth strategy to stretch an inherited Roth IRA and how to thoughtfully plan for long-term inheritance goals without hardwiring them into retirement plans. The episode concludes with a 'smart sprint' to download one’s Social Security statement and book recommendations on creating memorable experiences and confronting difficult histories.
Taking Social Security early and investing it may mathematically make sense only at very high investment returns (6%+), but introduces execution risk and market exposure.
Delaying Social Security to age 70 maximizes guaranteed, inflation-adjusted income and provides psychological and logistical simplicity in later life.
Health issues, even if currently absent, can impact longevity and make early Social Security more prudent.
Inheritance goals should not be hardwired into retirement plans; instead, use separate accounts or life insurance to preserve flexibility.
For those avoiding fees, low-cost index funds are a strong alternative to hiring a financial advisor unless the advisor adds non-investment value.
…and 3 more takeaways available in PodZeus
Welcome & Rocking Retirement in the Wild
“I love this, Steve. Steve goes on to say, I spent my whole career planning and driving towards accomplishing goals with most of those goals being directed by others. My desire to explore and express my own creativity was partially fulfilled in working within their direction, but my highest ambitions were severely constrained by the limitations of corporate culture.”
The Productivity Cult & Purpose in Retirement
“There's so much talk because it actually... You can create a podcast episode, Five Steps to Finding Purpose and all this other stuff that I and others do. And when we hear this, like this gentleman, all of a sudden is like, oh, I can't retire. I don't know what my purpose is. And so they stay working. That's scary.”
Should You Take Social Security Early & Invest It?
“At 6%, now taking it at age 62 leads from the investment end of it within that timeframe. But that's assuming you get that 6% return. You live to age 90, etc. So you can play around with this math all day long to get to an answer, Ken, for your friend.”
Arguments For & Against Early Social Security
Roger outlines key pros and cons: guaranteed income, inflation protection, and simplicity vs. investment risk, execution risk, and health uncertainty. He warns against over-optimizing for returns at the cost of peace of mind.
Inheritance Planning & Aspirational Goals
Roger addresses a listener’s question about planning for a future inheritance. He advises against hardwiring it into retirement plans and suggests using separate accounts, life insurance, or Monte Carlo analysis instead.
“There's so much talk because it actually... You can create a podcast episode, Five Steps to Finding Purpose and all this other stuff that I and others do. And when we hear this, like this gentleman, all of a sudden is like, oh, I can't retire. I don't know what my purpose is. And so they stay working. That's scary.”
“The value of having an advisor is going to have to outweigh the fees that you're paying, and that can outweigh it. And I would argue that... the value that you're going to get from working with an advisor will not be quantified in excess returns.”
“I love this, Steve. Steve goes on to say, I spent my whole career planning and driving towards accomplishing goals with most of those goals being directed by others. My desire to explore and express my own creativity was partially fulfilled in working within their direction, but my highest ambitions were severely constrained by the limitations of corporate culture.”
Host
Roger Whitney
person
Steve
person
Ken
person
Social Security Administration
organization
Bill
person
Rock Retirement Club
organization
Adam
person
The Noodle
other
Phil Marchion
person
Unforgettable
book
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