Why it’s Better to Retire Earlier than 70

Many people are thinking of retiring at age 70 to significantly boost their benefit with delayed retirement credits. That seems not a good idea after all.

If you opt to retire at age 70 to collect social security benefits, one would potentially receive up 128 percent of your monthly pension. If you retire early at 62, your benefits will be reduced by as much as 27.5%. At age 65, you can collect the complete benefit amount.

With this in mind, retiring at 70 seemed to be a smart choice. 

That's not necessarily so.

In a breakeven analysis shown in The Motley Fool, the cumulative benefits of a person who retired at 66 years old is only $2000 short of that one who retired at 70 years old after 12 years assuming a primary insurance amount of $1,000. 

While the amount seemed relatively higher, the chance of a person reaching the age of 82 is a snowball's chance in hell as the average lifespan of an American is 79.8 years old.

The cumulative benefit received by a person who retires at 66 and that of 70 are the same at age 77.

Moreover, the person who retired earlier is able to enjoy the benefits of early retirement like owning one's time and earning without working than the one who retired at 70, who remains chained to work for another 4 years.  

When you retire at 66, you can expectantly spend your free life in enjoyable things such as getting on a vacation, touring the world, and doing things that you've never done before. 

At age 70, chances are you will be too old to enjoy your retirement pension. There is a high chance that you will simply spend your retirement benefits to pay off hospital bills and healthcare care costs.

Finally, the idea of retiring is usually not much of a choice. According to New York Times, many people retire earlier than they want because they are laid off or their spouse becomes sick. The opportunity to work into one's 70s primarily pertains only to the rich, who can afford advance medical technology (e.g. stem cell therapy) to help them stay young longer and survive their illnesses better.