Retirement Starts Today Delay to 70? Not So Fast - The New Case for Claiming Early
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Oct 6, 2025 Only 4% of retirees wait until 70 to claim Social Security, raising questions about the common delay advice. Derek Tharp’s research challenges traditional assumptions, emphasizing the risks of mortality and sequence-of-returns. The discussion highlights a need for a comprehensive financial strategy that incorporates various income sources. Additionally, the pros and cons of single premium immediate annuities (SPIAs) are explored, with insights on when they might be suitable. Overall, it's a call for personalized retirement planning over one-size-fits-all advice.
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Zero Discount Rate Biases Delay Advice
- Derek Tharp argues the common 0% discount rate assumption biases models toward delaying Social Security benefits.
- Ignoring portfolio opportunity cost and real-world risks skews conclusions in favor of waiting until 70.
Real-World Risks Change The Math
- Tharp highlights mortality, sequence risk, policy changes, health-span, regret, and underspending as overlooked risks when delaying benefits.
- These real risks can make earlier claiming preferable despite theoretical lifetime-maximizing math.
Use Every Tool In Your Toolbox
- Build a comprehensive retirement plan using all available tools rather than evaluating Social Security in isolation.
- Combine wages, investments, Social Security, home equity, and other assets to meet income goals effectively.
