Social Security Advice Might Be Wrong

The blogger Physician on Fire has a recent article on Social Security timing of benefits (  As with virtually every article on the subject that I’ve seen, he concludes:

At full retirement age, I get 100% of my calculated benefit. But each year that I hold off nets me an additional 8% per month for life. Unless I find myself in poor health, the smart money’s on the most money. I plan to delay my benefit until age 70.

I think this blanket recommendation that is parroted throughout the financial press may be very wrong.  Waiting until age 70 to maximize lifetime social security benefits is predicated on several factors:

  1.  You live long enough (at least to your early 80’s) in order to recover the lost benefits -say between age 66 and 70.
  2. You don’t need the money
  3. That the payments promised, and the taxation of those benefits don’t change from the present.

It is number three that is ignored by this and just about every other article and Social Security calculator I’ve ever seen.  Social Security is rapidly depleting the “trust fund” that really exists only on paper. Within 15 years, benefits are designed to drop by up to 30% unless something changes.  Guess what-that change will be higher payroll taxes, probably higher taxation of benefits (currently 85% of benefits for most people with any outside income are taxable-it will be easy to raise that to 100%), and possibly a reduction in benefits for those with “means.”     Some of these changes would make all the current calculations wrong, and suggests that waiting to get the maximum benefit may be a bad choice.  

I’m a financial planner and plan to take benefits at Normal Retirement Age (66  and 4 months for me) instead of waiting till age 70.  If I was not still making an income before NRA (as there is a penalty for taking benefits then), then I’d consider taking benefits even earlier.   Give that some thought.

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Steven Podnos MD, CFP

Steven Podnos MD CFP attended the University of Florida College of Medicine and trained in Internal Medicine, Pulmonary and Critical Care Medicine at UT Southwestern in Dallas Texas. He moved back to Florida with his physician wife (ENT) and raised a family while practicing Pulm/CC medicine for over twenty years. During that time, he also started and ran a Hospitalist program for several years. In 2002, Steve began a slow transition towards having a Fiduciary Fee Only Financial planning practice-at first just for friends and family. As the practice grew, he transitioned out of full time medical practice to full time financial planning. Dr. Podnos joined the US Air Force Reserve in 2008 as a critical care physician and flight surgeon. He deployed twice to Landstuhl Army Hospital in Germany as an intensivist during the Afghanistan war in 2009 and 2010, and as a critical care air transport (CCATT) physician in Okinawa in July 2018. His firm, Wealth Care LLC now serves approximately 100 physician families nationwide and another fifty non physician families with both financial planning and wealth management. He is a staunch advocate of independent medical practice, believing that the corporatization of medicine and Electronic Medical Records are both harmful to physicians. 

  7 comments for “Social Security Advice Might Be Wrong

  1. Aaron M. Levine
    July 31, 2019 at 5:54 pm

    I started collecting SS at age 67 for exactly the proposed reasons. I knew my SS was taxable, but I did not know that the SS benefits would cause my Medicare premiums to jump as well. Another hidden tax. Now that I stopped working, I have to pay a Medicare higher premium each month while my application for a life changing event is pending.

  2. Seneca
    July 29, 2019 at 8:41 am

    If and when they do roll out means testing for Medicare and SS, it will be very interesting to see what not-so wholly unexpected consequences arise. Why would anyone save for the future if their own foresight penalizes them? Or, if you do want to put something away, better hide it offshore or elsewhere. I started an informal poll of friends and colleagues about the concept of means testing older Americans for entitlements and found that there is overwhelming support for this. I guess most people think it is just another example of social justice by eating the rich and productive.

    • mamadoc
      August 1, 2019 at 10:04 pm

      Means testing for Medicare is already here. You pay more for your part B based on your income 2 years before.

  3. Thomas David Guastavino
    July 29, 2019 at 3:41 am

    Once SS turns into another welfare program, which it rapidly will once it is mean tested, support will drop away quickly.

  4. Vincent
    July 28, 2019 at 6:48 pm

    Dr. Podnos,
    There is another error in your posting (perhaps not yours): The post states that SS benefits go up 8% per month, which is not correct. The correct statement would be that the monthly benefit goes up 8% per year that taking benefits is delayed, until age 70, when taking benefits is now mandatory.

    • Steven Podnos
      July 30, 2019 at 4:02 pm

      Vincent, thanks for catching that error-it was indeed mine!

  5. Pat
    July 28, 2019 at 5:52 pm

    Ah, “means testing,” the great redistributionist.

Comments are closed.