I’m single, retired and saved $2.3 million, but I’m still planning to take my Social Security early. Is that a stupid decision?

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I am a single male who has been retired for seven years. I have luckily made some very good investing decisions. My house and two cars are paid for, and my retirement accounts are 70% equities and 30% cash and bonds and are currently worth $2.3 million. I have no dependents and I live in a very inexpensive state. My annual income — taken from investments and a $10,000-a-year part-time job that I love — provides me $85,000 a year, which allows me to live and travel very comfortably.

Now that I am old enough to start taking Social Security, I have been reading as much as I can about the pros and cons of taking it early. If I take it now, my monthly distribution will be $2,500, but waiting until age 67, it will be $3,500.

I had this discussion with my investment adviser and we talked about how Social Security effectively pays you 8% per year to delay disbursements. He pointed out that I have made an average of 9% per year over the last 10 years in my investment portfolio, and taking it now would make sense. My spending wouldn’t necessarily increase, but I would end up taking less out of my retirement funds.

What do you think of this strategy?

Blessed in Wisconsin

Related: I’m 48 with $223,000 saved for retirement. I want to contribute an extra 1% every year. Will that have any meaningful impact?

There are many pros and cons to taking Social Security early, but how heavily they should be weighted depends on personal circumstances. Some people really have no choice because they need income in retirement as soon as possible. For those who think they will live a long while after age 70, and have sufficient income, an early claiming strategy is less relevant.

You have assets on your side, so now it’s really a matter of preference. You can follow your adviser’s suggestion, where you compare the 8% rate for delaying benefits with what you get in the market — that’s one way of looking at it. But as I’m sure you’re aware, the market fluctuates, and the industry has a saying: past performance is not a guarantee of future results.

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