In the United States, people can start claiming Social Security retirement benefits at any age from 62 to 70. Claim early and you get smaller monthly payments for more years. Wait and you get larger monthly payments, for life, but for fewer years.
Professor Slavov's research compares delaying Social Security to buying an annuity: you give up some payments now in exchange for a bigger guaranteed income later. She says it is a good deal for many people, especially higher earners in married couples, but she is slow to call early claiming a mistake. This activity shows why. There is no single right answer, and nothing here is financial advice.
Three retirees
Each person below is 62 and could claim today. Pick what you would suggest, then see what that choice optimises for and what it risks.
Decision 1 of 3
Maria earned a high salary all her career and is married. Her husband earned much less. Both are healthy, and they have savings to live on for now.
Decision 2 of 3
James worked physically demanding jobs on low wages and has health problems. He has almost no savings.
Decision 3 of 3
Priya moved to the United States at 45 and has paid into Social Security for fewer years than most. She enjoys her work.
Delaying is often a good deal, especially for higher earners in married couples. But health, savings and a person's work history all change the answer, which is why Professor Slavov is careful about calling early claiming a mistake. Priya's case reflects her research finding that immigrants who arrive after 40 tend to retire later.