Retire With Purpose - The Retirement Podcast 526: Rethinking Social Security: Why Waiting Until 70 Isn’t Always Best
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Oct 10, 2025 Is waiting until 70 to claim Social Security really the best move? The hosts challenge this common notion, discussing personalized financial strategies and the importance of expected value versus utility. They dive into factors like mortality, sequence of returns, and the math behind realistic discount rates. Exploring opportunity costs and flexibility in spending, they highlight how life expectancy assumptions can mislead financial decisions. Discover how earlier claims might offer more freedom and peace of mind in retirement.
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Beyond Expected Value Math
- Common Social Security research favors delaying to 70 but often relies on narrow expected-value math.
- Derek Tharp expands the analysis to include subjective utility and nuanced risks that alter that conclusion.
Expected Value Ignores Personal Utility
- Expected value frameworks ignore personal attitudes toward certainty and risk.
- Listeners value certainty differently, so a higher expected value doesn't always mean better personal utility.
Use Realistic Discount Rates
- Many analyses use near-zero discount rates which bias toward delaying benefits.
- Use a realistic discount rate tied to your portfolio returns to compare taking benefits earlier versus later.
