Delayed gratification is not something that comes easy to most of us. Yet one of the smartest retirement strategies you can make in your 60s is to delay when you start receiving your Social Security benefit. You can start collecting as early as age 62, but your benefit will be 25% to 30% less than if you wait until your full retirement age (between 66 and 67, depending on your birth year). If you delay the start all the way until you are 70, your benefit will be more than 75% higher than the benefit you could collect at age 62.

    But I know many of you are not convinced the math makes sense. Someone asked me two very smart questions: Why not claim early and invest the money? And isn’t it sort of risky to wait until age 70, given that we don’t know how long we will live?

Here’s what I want him, and all of you, to know.

    The higher benefit for waiting is guaranteed. The 6% to 8% annual benefit increase Social Security gives you for delaying your start between 62 and 70 is guaranteed. Could you earn as much investing on your own? Maybe. But it would involve taking a risk. No stock or bond investment guarantees a positive return that high. And as we all just experienced in 2022, when you invest you run the risk of your investment losing value. So, I repeat: The annual increase when you delay collecting Social Security is 100% guaranteed.

    There’s a good chance you will be alive into your late 80s. If you are in poor health, delaying Social Security may not be the way to go. But the bigger risk is the strong possibility you will live a very long time. Even if you don’t start to collect until age 70, you will come out ahead if you live into your 80s. More importantly, having a higher benefit constantly adjusted for inflation – by delaying can be extra important if your investment balances are lower in your late 80s and 90s. (See “Count on Surviving,” below.)

    Delaying is extra smart for married couples. When one spouse dies, the survivor is entitled to collect one benefit: their own earned benefit or the benefit of their deceased spouse. If the higher-earning spouse delays until age 70, that guarantees the survivor the biggest possible benefit.

    You won’t lose out on inflation bumps. If you delay collecting between 62 and 70, your account will be credited for any inflation adjustments during those years.

    Deciding when to start drawing Social Security requires making an assumption about how long you will live. My strong advice is that if you make it into your 60s in average health, you should assume you could live until at least age 90.

    That’s not me being extra cautious – it’s just the facts. According to the Society of Actuaries, half of the 65-year-old women in average health today will still be alive at age 88. For men, there is a 50% probability of still being alive at 85.