Social Security Break-Even Math Is Helpful, But Don't Let It Dictate When You'll File

Your Social Security break-even age can tell you how long you'd need to live for delaying to pay off. But it should never be the sole basis for deciding when to claim. Here's why.

By Kyle Hammerschmidt, Investment Adviser

published 18 February 2026

in Features

A man uses a calculator, only his torso and hand showing.

Most people approach Social Security like they're buying a warranty. They find the break-even age on a chart, circle it and call it a decision.

If delaying "wins" after 81, they wait. If the break-even is 79, they file now.

That logic seems straightforward, but in reality, retirement planning is rarely this simple.

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Claiming Social Security is really a trade-off between income today and higher guaranteed income later, and the ripple effects of that choice show up in taxes, portfolio withdrawals, Medicare premiums and what happens to a surviving spouse.

Break-even math can be a helpful starting point, but it's a poor finishing point.

Here are common break-even ranges people see:

Swipe to scroll horizontally

Comparison	Typical break-even age (approximate)	Plain-English takeaway
67 vs 70	80 to 81	Waiting can pay off if you live past your early 80s.
62 vs 67	Around 79	Early filing can "win" if life is shorter.
62 vs 70	Around 82	Delaying can "win" if you live into your 80s and beyond.

These ranges are a useful gut check. They tell you roughly how long you'd need to live for delaying to "pay off." But they ignore the costs you absorb while you wait, how markets behave, how taxes stack up and how your decision affects your spouse.

In other words, they assume everything else stays the same — but in retirement, almost nothing does.

The hidden cost of waiting: You must fund the gap

When you delay Social Security, you're not just choosing patience, you're choosing a different funding plan for your early retirement years.

Delaying from full retirement age to 70 means roughly three years without checks. Delaying from 62 to 70 can mean as many as eight years. During that time, your lifestyle still must be paid for.

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For most households, that gap is filled with money from an IRA or 401(k), a taxable brokerage account or cash savings. If most of your assets are pre-tax, the gap can be more expensive than people expect because withdrawals are taxed.

Needing $10,000 a month to live might require pulling far more than $10,000 from a 401(k) to net that amount after withholding.

This is where many savers get surprised. They focus on the larger age-70 benefit but don't fully account for what it takes to reach 70 without forcing large, taxable withdrawals or selling investments during a down market.

The decision isn't just "bigger check later vs smaller check now." It's also "how will I pay my bills in the meantime, and at what cost?"

Claiming age is a risk trade-off, not a math contest

A clearer way to think about Social Security timing is as a choice about how much of your retirement income will be guaranteed and how much will depend on markets and withdrawals.

Claiming earlier generally does two things:

It starts stable income sooner
It reduces how much you need to pull from your portfolio in your 60s

Delaying does two different things:

It locks in a higher monthly benefit that rises with inflation
It raises the long-term "floor" of income you can't outlive

Neither approach is automatically better. Early claiming prioritizes cash flow and simplicity in your 60s. Delaying prioritizes security in your 70s, 80s and beyond.

The right choice depends on which risks you care most about and what you want retirement to feel like over time.

Longevity risk: Why bigger checks later can act like insurance

Longevity risk is straightforward: You might live longer than your portfolio plan expects. Social Security is one of the few income sources designed to last for life, with annual cost-of-living adjustments.

That makes delaying, especially to 70, function a bit like longevity insurance. You give up smaller checks now in exchange for a larger, guaranteed check later that keeps arriving no matter how long you live.

This matters more if longevity runs in your family, if you expect to be the spouse who lives longer, or if you want more "sleep-well" income in your later years when managing investments may feel harder.

For many people with substantial savings, the fear isn't "Can I pay the bills this month?" It's "Will I still feel secure paying the bills at 87 without worrying about markets?" A higher guaranteed benefit can ease that future pressure.

Sequence of returns risk: Why the early years matter most

Sequence of returns risk means that bad markets early in retirement can do far more damage than bad markets later, especially if you're selling investments to fund spending.

This connects directly to Social Security timing. If you delay benefits, you may need larger portfolio withdrawals in your 60s.

In a down market, that can be painful because you're selling more shares at lower prices, which reduces your ability to benefit from a recovery.

If you claim earlier, Social Security can act like a buffer, reducing how much you need to sell when markets are weak.

For a household living mostly off investments from 60 to 70, waiting for a bigger check can work beautifully in smooth markets. If markets are weak in your first few retirement years, it can force withdrawals at the worst possible time.

That doesn't mean you should always claim early, but rather your plan should be stress-tested against an ugly market, not just average returns.

Spousal and survivor benefits: The household perspective

For married couples, the higher earner's claiming decision often matters more than any individual break-even age. That's because when one spouse dies, the survivor generally keeps only the higher of the two Social Security benefits.

Consider a simple example. John is the higher earner, and Mary's benefit is smaller. If John claims early and locks in a reduced benefit, Mary may be left with a permanently lower survivor benefit for the rest of her life.

If John delays and secures a larger check, that higher amount could support Mary for many years if she outlives him.

This is why Social Security isn't really two separate decisions for couples. It's a household decision with a built-in "what if one of us lives a long time alone?" stress test.

Taxes and Medicare: How claiming age reshapes your whole picture

For households with seven-figure savings, Social Security timing is tightly linked to taxes and Medicare premiums.

One key factor is the Roth conversion window before required minimum distributions (RMDs) begin at age 73. If most of your money sits in pre-tax accounts, your 60s may be a valuable period to convert some dollars to Roth at known tax rates.

Delaying Social Security can increase the withdrawals you need in those years, potentially pushing you into higher tax brackets and complicating your conversion strategy.

Social Security itself can also become taxable as your other income rises, so the timing of when benefits start affects how everything stacks together on your return.

Then there's Medicare. Premiums are based on your modified adjusted gross income from two years earlier. A big income spike at 63 — perhaps from IRA withdrawals or Roth conversions — can raise your Medicare premiums at 65. That two-year lookback makes planning especially important.

Some retirees even claim Social Security earlier not because they need the money to live, but because they want steady cash flow to help pay taxes on Roth conversions. In that setup, the benefit supports the tax plan, and the portfolio plan becomes simpler.

How to decide: A simple framework

A strong Social Security strategy starts with your withdrawal and tax plan, then works backward to claiming age. If you reverse that order, you can end up forcing withdrawals that create avoidable tax and market risk.

Begin by mapping your income from roughly 60 to 70 by evaluating:

Your spending target, and how it might change after the "go-go" years
Any pension income you'll receive
Which accounts you'll tap first across taxable, pre-tax, or Roth accounts
How long your portfolio must cover the gap if you delay benefits

Then run one "ugly year" test. Imagine markets are down, a major home repair hits, or medical costs spike. If delaying to 70 would force you to sell a lot of investments in that scenario, that's important information, even if the break-even math still looks favorable.

As a rough guide:

Claim at 62. Often makes sense if you're retiring early, markets look shaky, you want to reduce early portfolio withdrawals, or you're using your 60s as a tax-planning window for Roth conversions.

Claim at full retirement age (67). Can be a good middle path if you're still working near retirement, want fewer moving parts, or don't feel strongly about pushing all the way to 70.

Delay to 70. Tends to fit if you expect a long life, you're the higher earner protecting a spouse, you want the highest guaranteed income later, and your portfolio can comfortably fund the gap without forcing bad sales or big tax spikes.

None of these rules is automatic. They're starting points that should align with your broader withdrawal and tax strategy.

The bottom line

There isn't a single "correct" age to claim Social Security, there's only the right age for your plan. Break-even charts can tell you how long you'd need to live to come out ahead, but they can't tell you how you'll feel getting there, what you'll pay in taxes or how secure your spouse will be if you're gone.

Before you circle a number on a chart, step back and picture your retirement as a whole: Where your income will come from, how you'll handle bad markets and what your later years might look like.

When your claiming decision supports that bigger picture, you're far more likely to feel confident in it today and decades from now.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Kyle Hammerschmidt is the founder and CEO of MOKAN Wealth Management, a firm dedicated to helping self-made 401(k) and IRA millionaires keep more and pay less in retirement through a plan-led approach. He developed The Five Seed System™, a framework that connects all key areas of retirement — income, taxes, investments, health care and legacy — into one coordinated plan.