Our Waiting Game

Edmund Marsh

A FEW MONTHS AGO, my wife and I were searching for an exciting diversion on a Saturday evening. It didn’t take long to agree on the perfect experience—logging onto to check out our estimated Social Security benefits.

What’s so thrilling about that? Like many people, Social Security will comprise a key component of our retirement income. Even now, those future funds exert a strong influence on our plans.

Background. I’ll turn age 62 this month and still work full-time. Sharon is 58½ and works a few hours a month. We have no debt, and don’t expect to incur any. The only expenses looming in the near term are college costs for our 18-year-old daughter, along with our current living expenses. College is covered, and we live a modest lifestyle supported by our present salaries, with money left over for savings.

Destination. Our clearest retirement-income goal lies eight years down the road—postponing my Social Security until age 70 to get the maximum monthly benefit. For us, that eight-year delay is an easy decision.

For starters, we’ve no pension awaiting us, apart from a minuscule sum I’m eligible to draw at age 65. Because of that, we’re counting on Social Security as the anchor that’ll provide steady income amid the financial markets’ ups and downs.

The value of a U.S. government-backed, lifetime income stream that won’t be eroded by inflation can’t be overstated. Even the immediate-fixed annuities we’re considering as a supplement to Social Security, while commendable, can’t compare. For this reason, we want our monthly Social Security check to be as large as possible until the last of us leaves this world. We think it’ll help us sleep more soundly until that final day.

On top of that, waiting to claim makes good financial sense. We think the case for delaying Social Security withdrawals until age 70 has been well-argued, both here and elsewhere. My wife and I are in good health and expect our genes to give us long lives, so we strongly believe we’ll be around to profit from our patience.

At present, our salaries supply virtually all the money we spend and save. If we pare away all spending except on essentials, we’re left with core costs that we think will be largely covered by our combined Social Security benefits when I reach age 70. Sharon expects to have already claimed her check when she’s first eligible, at 62. This is the best strategy for us according to

The balance of our core retirement spending needs could be supplied by immediate income annuities. This option was off our radar a few years ago, but—to be honest—so was any serious thought of shifting from saving to spending. The more we study the topic, however, the more sensible it sounds.

Getting there. We know where we’re headed, but the exact route is an open question. We both agree that I should work full-time until I reach age 65. But at that juncture, our thoughts diverge on how to pay the bills until I start collecting Social Security at age 70. Which road do we take?

My wife would like me to fully retire at age 65. We’d have my tiny pension and her early Social Security, and draw the balance of our income from our investments. We could do it. While we’re not awash in money, socking away 35% to 40% of our income each year has allowed us to amass a modest pile of savings. We think trading some of those savings for a higher Social Security payout down the road is a sensible exchange.

Nevertheless, I know the decision to spend the precious treasure we’ve nurtured won’t be easy. We like the comfort of conservative investments. We already have more than enough money out of the market to carry us through the five years from my ages 65 to 70. But even with this backstop, I don’t think I could stomach pulling the retirement trigger in the face of a bear market.

What to do? I’m inclined to ease into retirement by shifting to part-time work, maybe clocking 25 hours per week. Those earnings, along with my pension and my wife’s Social Security, would easily fund our living expenses, with an ample amount left over for the fun my wife envisions.

The money from part-time work pays off in the future, as well. Each year we delay pulling money from savings means a year of spending still safely ensconced in our retirement accounts, hopefully ballooning ever larger. When added to my growing Social Security benefit, the potential returns from hanging on at the physical therapy clinic a little longer are compelling.

Cutting back without cutting loose also means I can stay flexible about when to call it quits. Most work carries a certain element of tedium, but that’s often true of life in general. I don’t lack for jobs to do or plans to pursue outside of work. But until those other activities overwhelm the sense of purpose that comes from my contribution at the clinic, I’m inclined to stay put. Both my boss and my patients seem to appreciate the service I provide. I’m not yet ready to fully forsake that feeling.

Like all life plans, ours has unique personal wrinkles that have yet to be ironed out. I suspect, though, that moving to part-time retirement in a few years will allow us to test the waters until we’re certain the time is right to take the plunge.

Ed Marsh is a physical therapist who lives and works in a small community near Atlanta. He likes to spend time with his church, with his family and in his garden thinking about retirement. His favorite question to ask a young person is, “Are you saving for retirement?” Check out Ed’s earlier articles.

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