Early Retirement Decisions and the Returns on Social Security for the Average U.S. Wage Earner
One of the most critical decisions affecting Social Security retirement benefits is when to begin receiving benefits. Numerous personal and financial factors should be examined and consideration should be given to maintaining the highest possible standard of living and quality of life during the retirement years as a result of the decision. While numerous factors should be considered by each individual prior to making the decision to retire, the analysis in this article indicates that postponing Social Security retirement beyond age 62 to age 66 or to age 70 produces higher returns on the Social Security taxes paid during an individual's working years based upon expected future benefits and life expectancy. However, starting benefits at age 62, if financially feasible in the individual's overall retirement plan, is the best course of action based upon the negative or very low rates of return received by retirees when delaying Social Security retirement benefits beyond age 62
Martin, D. W., Rose, C. C., & Beach, S. L. (2012). Early Retirement Decisions and the Returns on Social Security for the Average U.S. Wage Earner. Journal of Financial Service Professionals, 66(3), 36–42.