Dec 28, 2025
Deciding when to claim Social Security is one of the most consequential financial choices Americans will make.
This decision affects not only your monthly retirement income but how long your retirement savings might last and how much flexibility you’ll have in those early, active years after leaving work.
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Many financial advisors lean on the so-called “breakeven date” to optimize this timing. In theory, if you can delay your Social Security to a sweet spot, you could maximize the total benefits you enjoy over the course of your retirement.
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However, this simple breakeven date calculation could be missing some important elements that might leave you with a significantly worse quality of life in retirement.
The pitfalls of breakeven dates
The Social Security breakeven date is the point at which the total value of all the benefits you have collected matches the benefits you would have collected if you applied for Social Security earlier.
For many people, delaying benefits from 62 until full retirement age can mean experiencing a breakeven somewhere in their late 70s or early 80s. After that point, the longer you live, the more financially beneficial your decision to delay benefits would be.
Let’s say a 60-year-old waits until the full retirement age of 67 to receive a total of $2,546 per month. They would break even at the age of 78.4, according to one generic online calculator.
However, this simple calculation ignores one key element: opportunity cost.
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Opportunity cost
The simple breakeven calculation solely factors in Social Security, while ignoring your retirement portfolio.
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If you decide to retire at 62 but delay Social Security benefits until 70, you face eight years of steadily drawing down your retirement savings to bridge the gap. Any funds withdrawn could have been growing and compounding in either the stock or bond markets.
Withdrawing these funds also potentially exposes you to taxes on capital gains, based on the account type.
Depending on how big your benefit check would be, your tax obligation and the rate of return you expect your portfolio to generate, your total opportunity cost could be tens of thousands of dollars.
One way to avoid this opportunity cost is to simply work longer. However, spending the bulk of your 60s at work also has a downside on your retirement quality of life.
Quality of life
Retirement in your 70s or 80s may not be as enjoyable as it would be in your early 60s. Health tends to deteriorate with age, and you might be more exposed to chronic illnesses or physical limitations.
By the time you reach 70, you may no longer be able to fully enjoy retirement, and it can be more expensive to get insurance to travel abroad as risk rises with age.
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If you’re already struggling with health issues, you may need to consider your longevity. Obviously, nobody knows how long they will live, however, it’s something to keep in mind if your breakeven age is in your mid-80s.
Life expectancy in the U.S. is 78.4 years, according to the Centers for Disease Control. (1) If you have reasons to believe you may not live far beyond this age, you might want to focus on applying for Social Security at a time you might get the most enjoyment out of it.
That’s not to say you should take benefits as soon as you qualify. But keep your opportunity cost and quality-of-life factors in mind while you determine the right time to apply for benefits.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Centers for Disease Control (1)
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
