Updated

Updated · 24/7 Wall St. · Jul 10

Retiree Builds $900,000 Portfolio After Claiming Social Security at 62, Challenging Wait-Until-70 Rule

Updated

Updated · 24/7 Wall St. · Jul 10

Retiree Builds $900,000 Portfolio After Claiming Social Security at 62, Challenging Wait-Until-70 Rule

Q: His early Social Security claim built a $900K portfolio, but what hidden market risk could make this strategy backfire for others?

The key hidden risk is sequence-of-returns risk, amplified by the possibility that future markets may not resemble the strong bull run that helped this retiree. His strategy worked in part because claiming at 62 gave him cash flow while stocks enjoyed exceptional gains. But for others, a sharp market decline early in retirement can be damaging even if long-term average returns later look acceptable. If retirees need to sell investments during those early down years to cover spending, they lock in losses and leave fewer assets to recover when markets rebound. That risk is especially important because the success of this case depended on unusually favorable market timing. The S&P 500’s powerful gains over the past decade are not guaranteed to repeat, and elevated valuations can raise the odds of weaker future returns or a bear market. In that setting, an early claimant is stuck with permanently smaller Social Security checks while their portfolio may be growing more slowly or falling. The strategy can still make sense for retirees with large portfolios, shorter life expectancy, or strong legacy goals, because portfolio assets can be inherited while Social Security generally cannot. But it backfires if poor returns arrive early, withdrawals are inflexible, or the retiree overestimates future stock growth. That is why advisers stress stress-testing the plan with bear-market scenarios, cash reserves, and flexible spending rather than assuming past market performance will continue.

1 articles · Updated · 24/7 Wall St. · Jul 10

A 78-year-old who claimed Social Security at 62 in 2010 says the decision paid off: his portfolio is now about $900,000 despite ignoring advice to wait until 70.
The usual case for delaying is powerful on paper — benefits claimed at 70 can be 77% higher than at 62, with breakeven typically in the early-to-mid 80s.
For retirees with sizable assets, the article argues, early claiming can preserve compounding and inheritance value because a roughly $16,800 annual check reduces the need to sell investments.
That tradeoff looked especially favorable over the past decade, with the S&P 500 returning about 255%, while even early benefits kept rising through annual COLAs, including 2.8% for 2026.
The broader takeaway is that claiming strategy depends less on a universal rule than on portfolio size, health and marital status, with delaying still often favored for higher-earning spouses.