"If you’ve built a solid nest egg and are retiring in your early 60s, don’t dismiss age 62 just because of conventional wisdom, it might be the exact move that keeps your portfolio healthy for the long haul."
Author – Dean E. McCullar, CFP ®, CDFA®, Vice President & Financial Advisor, LP
As a CFP® professional, I often surprise early retirees by suggesting they consider taking Social Security at 62 rather than waiting until 70. While the industry "mantra" focuses on the 8% annual increase gained by waiting, claiming early can be a power move if you're stepping away from work in your early 60s. By creating an immediate floor of guaranteed income, you shield your 401(k) or IRA from Sequence of Returns Risk…the danger of being forced to sell your investments while the market is down just to pay your bills. This allows your retirement accounts to remain untouched, giving them more time to grow and potentially leading to a much higher total net worth later in life.
Often when I run these scenarios through financial planning software, I see a fascinating paradox: while the plan "Probability of Success" might drop slightly, the projected ending net assets are frequently much higher. Of course, your 401(k) still needs to be in gear. You can't let off the risk gas pedal too much, but a traditional 60/40 portfolio is usually more than enough to make the math work. By using the government’s money for daily expenses first, you let your own investments stay in the driver's seat.
Ultimately, taking Social Security early isn't about leaving money on the table; it’s about strategic growth. It can open a "Roth Conversion window" to lower your future tax burden and keep more of your retirement assets available for you or your family. If you’ve built a solid nest egg and are retiring in your early 60s, don’t dismiss age 62 just because of conventional wisdom, it might be the exact move that keeps your portfolio healthy for the long haul.
Category: Retirement
