An Odd Argument

Jonathan Clements

IT’S ONE OF THE stranger arguments for claiming Social Security retirement benefits at age 62—but I’m hearing it with increasing frequency. The contention: We should claim benefits early because we’ll enjoy the money more in our 60s, when we’re traveling and spending more, than in our 80s, when we’ll likely be sticking closer to home.

It isn’t clear to me that we should expect to spend less in our 80s, when we may have significant medical expenses. It also isn’t clear to me that money buys less happiness in our 80s. I find it hard to imagine what the octogenarian version of me will be like.

Still, let’s assume that both contentions are true—that we will spend less in our 80s and that we will get less pleasure from our money. So what? Even if we need less income at that juncture and even if we don’t enjoy the money we spend, we still need to pay the bills.

In other words, pleasure has nothing to do with it. As retirees, the challenge is to manage our money so we have enough income for every phase of our retirement, no matter how long we live. For many of us, the right strategy is to delay Social Security until age 66 and perhaps age 70. That’ll give us a larger stream of guaranteed lifetime income, thus reducing the risk of poverty if we live to a ripe old age. What about all the traveling we want to do in our 60s? To pay for it, we can simply draw more heavily on our savings, knowing these withdrawals will slow once we start collecting Social Security.

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