Many older Americans wonder when the right time is to claim Social Security. You can start receiving benefits as early as 62, but the longer you wait, the larger your monthly payment — with the maximum increase reached at age 70.
If you claim Social Security at 62, you’ll receive smaller checks. If you wait until 70, your monthly benefit will be about 76% higher, according to Laurence Kotlikoff, a Boston University economist.
For those born in 1960 or later, the full retirement age is 67. Claiming before that reduces your benefit while delaying increases it by about 8% per year.
For example, the Social Security Administration estimates that a person claiming benefits at 62 might receive $1,400 per month.
If they wait until 70, that monthly check could rise to $2,480. Over a lifetime, a person who claims at 62 could expect to receive about $362,600, while waiting until 70 would increase their total lifetime benefit to roughly $404,200.
This suggests that most people would benefit more from waiting until 70 to claim Social Security. But what if you claimed benefits early and invested the money instead? Could you come out ahead?
Could Investing in Early Social Security Checks Pay Off?
Some wonder if claiming Social Security early and investing the money could outperform the benefits of waiting until 70. The answer, according to experts, is that it’s possible — but risky.
Kotlikoff believes it’s unwise. “You’ve got something that’s paying an enormously strong return,” he said, noting that the government essentially rewards you for waiting.
The 8% increase per year (plus cost-of-living adjustments) is comparable to average stock market returns of 6.37% after inflation, according to Investopedia.
Keith Singer, a financial planner in Florida, agrees. “Most investors aren’t going to get returns that beat the 8% roll-up and inflation aspect of Social Security,” he said.
Even so, some retirees still consider the strategy. Jim Sohan, a 65-year-old retiree, claimed benefits at 63 and is considering investing the funds. “If you don’t need the Social Security to live off of, you’re sort of playing with the bank’s money,” he said.
The Risks of Trying to Beat Social Security
To come out ahead by investing in Social Security early, you’d need to consistently earn higher returns than the guaranteed 8% increase from delaying benefits. That’s difficult because the stock market is unpredictable.
Robert Brokamp, a senior adviser at The Motley Fool, points out that to “beat” Social Security’s guaranteed return, you’d need to make up the difference through risky market investments.
“It’s pure gambling — and dumb for most people,” said Monique Morrissey, an economist at the Economic Policy Institute. “I would not encourage anyone to do this, except Elon Musk.”
For most Americans, Social Security is essential. About 77% of Americans rely on it to cover necessary expenses, according to a 2024 Bankrate survey. This means that most people can’t afford to gamble with their Social Security funds.
However, some financial experts believe you could come out ahead if you invest carefully.
A Motley Fool analysis found that if you earn 5% annually on invested Social Security dollars, you could potentially benefit more from claiming at 62 rather than waiting.
But this only holds until around age 90 — if you live longer, the higher payments from waiting until 70 would eventually be more beneficial.
Ultimately, investing your Social Security checks comes with risk. Caleb Silver, editor-in-chief of Investopedia, sums it up: “You have to be ready to take that risk.”
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