Why Waiting Until 70 for Social Security May Cost Wealthy Retirees Six Figures - By Matthew Simpson, CFA

Recent client discussions prompted a quantitative review of Social Security claiming strategies for affluent households. While conventional guidance often recommends delaying benefits until age 70 to maximize lifetime income, a more comprehensive after-tax and probability-weighted analysis suggests that earlier claiming may, in certain circumstances, increase expected after-tax wealth and improve financial flexibility.

Under specific assumptions, claiming at age 62 may generate approximately $220,000 of investable capital by age 70. Once taxes, portfolio return assumptions, and longevity probabilities are incorporated, breakeven ages frequently occur later than commonly cited in traditional analyses.

For high-net-worth retirees, the decision often involves weighing:

• Liquidity needs

• Tax efficiency

• Guaranteed income relative to total net worth

• Longevity insurance considerations

The full modeling framework and assumptions are outlined in the article published by the CFA Institute.

We encourage investors to review the complete analysis and evaluate how Social Security claiming fits within their broader retirement, tax, and estate planning strategy.
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