It’s the age-old dilemma that arises once one enters one’s 60s: Should one take Social Security sooner or put it off to receive a fatter payment later?At the end of the day, delaying things like Social Security benefits can be met with far greater rewards at some point down the road. That said, delaying gratification isn’t always the best answer when one enters one’s later years.Indeed, in one’s early-to-mid 60s, one reaches a point where putting things off may not be the best course of action. In fact, if one has a sizeable enough nest egg, cracking it open makes the right move. Of course, it all depends on where you stand financially, your lifestyle, and how long you expect to live.In this piece, we’ll tune into the case of a 61-year-old who’s a year away from being eligible to take Social Security benefits. With a fair income coming in ($4,400 per month) and a very modest amount of savings ($190,000), the individual is wondering if they should take Social Security benefits at the minimum eligible age (62) and invest it.
Taking Social Security sooner with the intent to invest isn’t the right move for everyone.
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Undoubtedly, if you take Social Security benefits sooner rather than later, you’ll receive less. Still, if you can score a better return (more than 8%), opting in and investing could be the best move.Of course, it’s an aggressive pathway that not every retiree will be comfortable with. When you’re in your 60s, you can’t take on as much risk as you did in your 20s or 30s. Everyone’s risk tolerance and craving for returns will be different. That’s why I’d suggest consulting a certified financial advisor before making a move that will set the tone for the rest of one’s retirement.Investing Social Security in stocks can make sense, but it can be a risky move.Some of the more aggressive retirees may wish to take a page out of financial guru Dave Ramsey’s playbook. He thinks the best move is to take Social Security sooner (rather than later) while using the proceeds to invest in the stock market.In my prior piece, I covered Ramsey’s advice of taking Social Security at 62, noting the pros and cons of doing so. Of course, the biggest pro is that you’d end up with more cash for your retirement, especially if stocks continue to gain at an above-average rate.However, on the flip side, the stock market doesn’t always gain by high-double-digit percentage points. Arguably, too many investors have been too conditioned to expect significant gains from stocks after two consecutive years of returns north of 20%. The fact of the matter is that stocks will not always go up in a straight line.While 10% (or so) returns may be the expectation for annual stock