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FINANCIAL EXPERTS often advise retirees to delay claiming Social Security. Their actuarial tables and statistics make a compelling case. Still, as soon as I’m eligible, I’ll strongly consider claiming Social Security.
Why? I never knew either of my grandfathers. My mom’s dad died of a stroke when she was age 19. One of my favorite photos of my parents’ wedding is that of my uncle—my mom’s oldest brother—walking her down the aisle. My grandfather never got to see my parents wed.
My dad’s father died very young as well. Dad had no memory of his father. My dad Jorge passed away at 72. I was grateful he had 10 years of retirement, and was able to enjoy his grandchildren and have some years of leisure. He had earned it after almost 40 years at a retread factory.
One summer, I worked as a temp at the same factory. Despite the modern machines and far safer working conditions, it was hot and the work physically demanding. I was 25 years old and in good shape, but it was still tough. It made me appreciate the work my dad did to support our family all those years. Along with his pension, he was able to retire only by claiming Social Security benefits at age 62.
My father-in-law Mike was a kid from a working-class background. The only high school graduation gift he received was a Vietnam draft letter. After a tour of duty that exposed him to Agent Orange and constant military combat, he came home and started a small business as a plaster contractor. He made a living. He didn’t get rich. For more than 15 years, to earn extra money, he worked at the local bowling alley after a full day of backbreaking plaster work.
When I met my wife, he no longer had his second job, but continued hanging plaster ceilings and doing repair work fulltime until he claimed Social Security “early.” He continued to work part-time, doing small jobs until he paid off his mortgage and was able to retire fully. To say his work was hard on his body is an understatement. His knees, back, hands and neck all paid a price for the incredible workmanship he displayed with his craft.
I’ve had it easy compared to my dad and father-in-law. But I did work a swing shift for 20 years. One week, I’d work 7 a.m. to 3 p.m. I’d get the weekend off and go in Sunday night for my week of graveyard shifts, 11 p.m. to 7 a.m. On Friday morning, I’d get off work at 7 a.m. and not have to return until Monday at 3 p.m., when I’d start my week of 3-11s.
I always slept fine when I was on the graveyard shift. But as I got older, it began to wear on me. Currently, I’m just working straight days. I didn’t expect working a straight day-shift schedule at the plant to be that different, but it’s been enlightening to see how much better I sleep and feel.
I understand the numbers and statistics that support claiming Social Security benefits later. But I can’t help but want to hedge my bets and claim my benefits at age 62. I’m 100% certain that, if I’m still working at the plant at that age, I won’t hesitate to retire and claim my benefits. That would go double if I was still working a swing shift.
Hooking up a railcar in subzero temperatures at 3 a.m. in January isn’t something I’ll be doing if I can supplement my retirement savings with Social Security. The numbers a financial advisor can show me in his temperature-controlled office won’t be enough to convince me to go to work on a wintry Iowa Sunday night for one more shift than is absolutely necessary.
Juan Fourneau’s goal is to retire at age 55. When he isn’t at his manufacturing job, he enjoys reading about personal finance and investing. Juan, who is married with two children, can still be seen in the ring on the independent professional wrestling circuit. He wrestles as a Mexican Luchador under the name Latin Thunder. Follow him on Twitter @LatinThunder1. Juan’s previous article was Taking on Tenants.
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Why I didn’t wait … entirely. First, it’s a very individual decision as to when to take Social Security. The pundits mostly fall on the side of wait till 70 unless you “really need” the income now. With comments like “it’s your insurance for when you’re old” and “take the 8% annuity that SS provides”. For me, I started taking at 66. My FRA was 66 and 2 months, but there is no magical boundary when you’re not working as far a reduction of benefits. I had planned to wait until my FRA and not 70 anyway but COVID nudged me into retirement in 2020. I spent a year or two prior to that running spreadsheets on the breakeven age of taking versus waiting using a number of scenarios. I will say it’s a difficult analysis with taxes, inflation, investment returns etc. I used 5% cost of money for my calculations not 2% that most online calculators use by default, because I intend to stay conservatively invested in the market. I came to the conclusion that if I waited till 70 instead of taking at my FRA I would catch up and start to get more at about 83 assuming I lived that long. For me that was likely as I am in good health. But life has no guarantees. I survived stomach cancer in 2015 and that definitely changed my outlook on waiting for things as I drift into my “golden” years.
One of my pet peeves with retirement calculators is that they assume you will be just as active at 85 as you want to be the day you retire. I would rather front load my retirement to do things while I have better health and vitality and I’ll scale back to sitting around playing cards when I lose my energy. By then a much larger portion of my expenses will be medical and not travel and such.
I was fortunate enough to have saved enough money that I could have squeaked by without SS but it would have been tight. In the end I decided that I would rather take and spend the 4 years of SS (that my heirs can’t keep if I die) than my nest egg. So time will tell whether I made a good decision or not but so far I got really lucky that during 2021 while we’ve lived mostly on SS my invested nest egg had huge returns. At least this year the gamble paid off.
Taking social security at 62 is the opposite of hedging your bet. Your bet is below average longevity, so a hedge would be planning for above average longevity. If that is your choice, then fine, but make no mistake; you are certainly not hedging your bet.
Personally, I would rather spend most of my savings on delaying social security for as long as possible, because there is no other source of truly inflation adjusted income (outside of government pensions, which I do not have). Even if it means I die at age 69, having never claimed a dime of social security, then that’s just fine with me, given the comfort and assurance of that unlimited future income.
It is refreshing to hear a different perspective and “voice” than what we usually hear from traditional financial advisors.
Me, a CPA, CFO and finance expert who hasn’t had a physically demanding job since I was a golf caddy 47 years ago in grade school, I am definitely planning to wait until age 70 to begin collecting benefits (subject to further review based on any future changes to tax laws and means testing changes to make SS more solvent). And I preach this view vigorously to other “white collar” workers like myself who do not have any family hereditary history of shorter life spans, or who are happily married to spouses who are blessed with “good genes” for longevity (or both). Articles like this do not change this calculus for me at all, of course – and of course it wasn’t intended for those in my circumstances. (BTW I suspect > 50% of Humble Dollar readers skew towards similar “white collar” careers and not working on a factory floor, in railway switching yards or doing physically demanding acrobatic maneuvers in a wrestling ring).
But for those whose income sources do require being on your feet (or periodically on your back, in a ring!) to generate income, I totally get it, and were I in similar circumstances I might have written this article myself. One of my 7 older brothers was a golf course maintenance superintendent whose career involved physically demanding work outdoors in midwestern golf season from spring-to-fall, and on his feet repairing equipment in the shop during the winter. (He has a bachelors degree, used to work for the IRS and also does tax returns as a preparer every winter/spring. A very smart and financially astute guy.) He just began collecting benefits at age 62 last year.
I encourage adding more writers such as Juan F., who bring a greater diversity of perspectives and backgrounds, which may thereby attract a broader diversity of Humble Dollar readers.
In my experience we all learn much more by being exposed to both sides of an argument, especially those like the optimal age to begin collecting SS benefits – where there is clearly no “right” answer which applies to us all.
This reminds me of a favorite saying: “If you and I agree on everything, one of us is probably unnecessary…!”
Thank you for the comments and kind words. I agree there is no “right” answer for the optimal age to begin collecting SS. I’ve talked to many who retired under several different circumstances over the years. All agreed one huge factor was if you were still working a swing shift.
I’m failing to see the value of this article. Plan to retire at 55? Plan to collect social security at 62? This is a plan? There aren’t any better options than this? It sounds far more like a failure to plan. I rather disappointed this article was on Humble Dollar. I thought the goal was to do better than this? I sure hope any readers don’t take this as advice.
Interesting points about the potential impact of physical work on long term retirement benefits. May I just say how pleased I am that Humble Dollar is offering alternative voices – like the beautifully-masked Latin Thunder. Quiero mas ideas financiales de Ud.!
Gracias!! Thank you for the kind words about my mask. At 48 I can still wrestle and love wearing my mask to show my love for Lucha Libre and my heritage.
I think your article illustrates the unfairness of a SS system that doesn’t take into account how difficult it is to work in physically demanding jobs until one reaches FRA.
I think that’s why there are quite good disability benefits.
disability maxes out at about $13 000 per year. Now you are crippled, unable to enjoy retirement, and trying to live on $13 000 a year. Hm. Maybe this isn’t quite fair to essential workers ?
I have a desk job in IT, unfortunately it is high stress and has on-call requirements. Every month or two I get to work a twelve day week. In my early 60s now, seriously doubt that I can keep this up until 70. But I have to, as my wife was out of the work force for a while to raise our children, and her family lives to 100 regularly.
Used to help a friend on his farm in Wyoming, find I can’t put in a full day’s work on the farm anymore – physically not capable. I was a competitive ultramarathon runner, then a triathlete, so in decent physical shape. After 60 things just start to fall apart. Working a physical job after 60 is absolutely no fun, and I’d be taking SS at 62 in that situation too.
Your comments on disability benefits are something that isn’t discussed often. Got me remembering dad talking of some co workers who were able to claim disability benefits and how that was a game changer for their retirements. I remember one job at my dads plant that he said they always sent the young men to. It was guaranteed to cause back pain. As the 80’s came along the plant quit hiring and one of his friends Pedro stayed on the job for years. Eventually technology made the job safer but not before it damaged many young mens back.
I first retired as a construction ironworker at age 55 after having open heart surgery to replace a bad heart valve. I had to return to working at age 61 due to the cost of health insurance and the high deductibles under the ACA. I appreciate your comments about those who need to retire early due to the toll their hard work has had on their bodies. As I returned to work and the toll loading trucks for Amazon has had on me I was dismayed to find that I was no longer eligible for SS disability because I no longer had enough credits. That is another thing it seems no one talks about. By the time I gain enough credits to be able to claim a disability I will be 66 and 7 months and eligible to retire with full benefits…..IF I MAKE IT THAT LONG.
I never worked in jobs you describe, I worked in an office for fifty years so I cannot appreciate the conditions you describe. However, I did work closely with union workers; my jobs being to process their disability and workers compensation claims and sadly, too often in the early days, the widows death benefits from on the job accidents. I then processed their pensions and at one point 1/3 were based on disability. So i have seen the consequences of physical and dangerous work and I can understand the desire to get out from under.
However, I have also seen the consequences of workers getting out early, retiring at 55, collecting their SS as soon as possible and twenty even thirty years later struggling to live on those reduced benefits. Even worse, a surviving spouse trying to live on only a portion of those benefits.
My point is, have a plan that is more than collecting SS at 62. That includes both a financial plan and a life plan and both that your wife is 100% in agreement with. Now is the time to say to yourself, if i can get out of here at 55, then what? Can I live as I want to and do what I want to and my wife and I still be financially secure for 20-30 more years?
Of course you can if you are focused on that goal. My dad passed a year + after retiring at 65 and that sealed the deal for me. I bailed out of the corporate America pressure cooker at 52 and never looked back.
I had made my goals – no debts, some money in the bank, then got a rather menial and easy job for some walking around money for a while, and improved my health and blood pressure. My wife had benefits with her job that she loved, so it worked. (That was key, of course). She eventually understood how I could possibly leave a “good job” – there’s more to life. The way it was going 25 years ago, I probably would not have been here to write this while still enjoying peace and happiness with my family.
Sounds like you made a great decision!! As you noted your wife having benefits with a job she loves helps. Everyones circumstances are unique. A friend who works at the plant is planning on retiring at 55 as his wife works at the plant as well and loves her job. He doesn’t hate his job but he’s ready to have time for all the other things in his life.
This is some of the best advice. This isn’t a race that ends at 62, it unfortunately ends when ones spouse passes. Some of the best advice I received was plan for retirement like there is no SS. If you truly need it for retirement, there is a good chance you really cannot afford to retire and will pay for it later on in life.
Dios está contigo Juan, que los días sean tan brillantes como tu sabiduría.
Gracias, muy amable. Que se vive La Lucha Libre Mexicana!!