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