Hey, I didn’t know that!!
1. Rule #1: Do NOT take Social Security benefits at age 62.
65% of males and 76% of females aged 62 will live to age 78. Why is that significant? That is the age when taking Social Security at age 62 will start losing you money. The loss becomes larger every year thereafter so that by age 82 you may have lost tens of thousands in earnings. How many make it to age 82? 55% of males and 67% of females who live to age 62. If you are out of work and impoverished, or in poor health, then take it when you can. Otherwise, I recommend waiting a year or two.
2. Rule #2: When you take your benefits MAY matter for a surviving spouse.
The most your spouse can receive is the greater of his or her benefit. However, waiting beyond your Full Retirement Age (FRA) “will not count.” The spouse cannot receive more than you would have received at FRA. And, taking early benefits will limit the total benefits your spouse may be able to receive. Thus, this is a decision for you and your spouse to make together.
3. Rule #3: No matter what others say, waiting until age 70 to take Social Security benefits is probably a bad deal.
(First, see rule 2.) It only benefits those who live beyond age 83. By then, you may not care. Let’s be realistic. 81 ½ is the longevity crossover year for males (fewer than 50% of those who make it to age 62 will still be alive) and 84 ½ is the crossover for females. Fewer than 50% of 62 year olds will live longer. Genetics might help you decide. If those in your family tend to have long lives it could benefit you to wait, but for most people there’s a mix of genetics.
4. Rule #4: Keep working.
Did you know that before FRA you can receive SS benefits AND earn about $23k per year without penalty. More importantly, the YEAR of your FRA (let’s say your birthday is in August) you can earn about $62k without penalty; so if you are working in January, you can earn over $5k per month and still take your SS benefits. Then, when you reach FRA (August) you can earn an unlimited amount without losing a penny of your SS benefits.
5. Rule #5: Sign up for Medicare A, B, and D on or before your 65th birthday.
DO IT!!! If you don’t hop on this you will be penalized (it will cost you money for the rest of your life). Sign up for Medigap at the same time. Those who try to sign up later may have to take a physical when applying (and your premiums could be much higher).
6. Rule #6: Medigap plans are best studied carefully.
There are several types of plans (A through M), [There are also “Advantage” plans, which I don’t recommend for those who will be spending time in more than one state, those who don’t live near a large city, or those wanting to travel to other countries. Read the details of YOUR plan carefully!!!] Each Lettered Plan has different benefits, and may have different costs because several insurance companies may offer them. However, one additional thing you should know is that there are 3 methods of determining your premium amount. You can choose Attained Age Pricing, Issue Age Pricing, or AARPGroup Pricing (not what they call it). The most common (and thus the one least in your favor) is Attained Age. As you age the premiums rise. If you aren’t an AARP member you may want to find a provider with a plan you like which offers Issue Age Pricing. Issue Age Pricing premiums will not increase because you age, but may increase for other reasons (inflation, etc). This gives you a much more stable premium level which you will be able to afford later as you age.
7. Rule #7: Fools quote that men only live to age 74.
That’s a lie. At BIRTH a male has an expected lifespan of 74+ years, but if that boy reaches age 10 he has an expected lifespan of more than 76 years. “Explain that, Einstein!” Here’s the little secret: The older you get the more unfortunates you have outlived who were born the same year. Of the 100,000 babies born the same year you were (male, female and whatever other sex there is) about 670 of them failed to survive by first grade. Another 81 did not make it to puberty. Then Jimmy died in a car accident, or when someone dropped a rock on him, or swimming in the gravel pit. Fred died snorting coke, or by a stray bullet. Phil died when he foolishly tried to replace an electrical outlet without turning off the current, or by forgetting to run when the tree he was cutting down fell. Those others died YOUNG, but you didn’t. They shortened the “average.” You’ve beaten the averages by living. The Social Security actuarial table declares that a man who lives to age 80 has a remaining likely lifespan of 8+ years. (88, not 74). He’s a survivor. You can be, too.
8. Rule #8: You probably won’t “win” by waiting until 70 to collect.
If you read this 3 times it may stick. SSA knows that 16.8% of recipients who are 62 will die by age 70. Only 6.3% die by age 65. Waiting 5 more years almost triples your chances of getting nothing. Worse, (see rule 3) it will take 13 years to “win,” and the chance of living to age 85 is below 50%. Thus, more than half of those who wait until 70 to collect will fail to receive what those who started at age 65 received. There’s a benefit “sweet spot” based on payment amount and longevity. Too early (62) or too late (70) are both poorer choices.
9. Rule #9: Social Security will not go bankrupt.
It is likely that benefits will be reduced, but many likely will be “grandfathered” into the higher benefits. I think a few things will definitely happen. For example, The earliest age for collecting benefits will move to age 63 or later. Also, the maximum earnings subject to taxation will rise above $250k. And, there will be additional penalties for those who take it early. A reduction which may be repaid little by little after FRA. Finally, those who know the numbers have made this comparison: The federal government spent more on housing for illegals in the last 10 years than it would take to make SS solvent for the next 50 years. This is not impossible to fix.
Copyright 2025 Donald Whelpley
[PLEASE NOTE that Don is always open to discussing the thoughts and opinions he shares here and welcomes comments as shared in the comment section. He doesn’t use other social media platforms and won’t see whatever you’d like to share with him if you post it elsewhere.
ALSO, Don is always open to offer his thoughts on various topics. If you have a specific request, you can let him know in a comment; he reads – and replies to – them all. ~ Sherry]
See more GUEST POSTS from Don!
Comments