Two Experts Debate When You Should Take Social Security—But here’s the TRUTH!
Release Date: 11/19/2025
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info_outlineToday’s episode revolves around one of the biggest financial debates among pre-retirees and retirees: When should you take Social Security?
Host David McKnight touches upon the recent debate of two of the smartest voices in the field – Dr. Laurence “Larry” Kotlikoff and Dr. Derek Tharp – on this exact question.
Dr. Tharp, out of the University of Southern Maine, notes that economists commonly recommend delaying social security benefits until age 70.
Boston University’s Dr. Kotlikoff agrees and explains that delaying can give you a 76% higher monthly benefit compared to taking it at age 62.
Since Social Security is inflation-adjusted and guaranteed for life, it acts as longevity insurance.
Hence, Dr. Kotlikoff thinks that waiting doesn’t only help you but your loved ones too.
Dr. Tharp isn’t convinced: he points out that only about 10% of workers actually wait until age 70 to claim benefits.
Overall, he sees studies that recommend delaying rely on overly conservative assumptions – they assume that retirees earn returns similar to Treasury inflation-protected securities.
With this line of thinking, if your portfolio is earning 5% real returns instead of 2%, then delaying your benefits might not look as attractive mathematically…
Dr. Kotlikoff cites Menahem Yaari’s 1965 paper, which suggests looking at delaying social security like buying insurance. It protects you from the catastrophic risk of living too long and running out of money.
The debate continues with Dr. Tharp talking about the sequence of return risk.
If the market drops early in retirement and you’re forced to withdraw more from your investments to delay Social Security, you can permanently damage your “nest egg”.
Even though he acknowledges Dr. Tharp’s point, Dr. Kotlikoff points out that most retirees have options, such as continuing to work longer, cutting spending, downsizing, or borrowing temporarily instead of taking benefits early.
Plus, he adds, the people most affected by sequence of returns risk are, generally, wealthier households…
Dr. Tharp concludes the debate by citing a study showing that retirees tend to spend about 80% of predictable income streams like Social Security or pensions, but only about 50% of portfolio income.
He also brings up Bill Perkins’ book Die With Zero into the conversation.
Perkins believes that Americans often focus too much on lifespan and not enough on health span.
Dr. Kotlikoff responds by stressing that some people underspend, while others overspend… and that’s exactly why there's a need for good planning software.
For David, both Dr. Kotlikoff and Dr. Tharp make valid points, and it all boils down to a key question: how long are you going to live?
If you’re likely to die at 63, then you should probably take Social Security at 62. If you’re going to live to age 100, it makes sense to wait until you’re 70.
While there’s no accurate way to determine that, there’s currently a group of people who are in the business of figuring that out: life insurance actuaries.
David shares two reasons why you may want to consider the additional benefits of life insurance, especially Indexed Universal Life (IUL).
Mentioned in this episode:
David’s new book, available now for pre-order: The Secret Order of Millionaires
David’s national bestselling book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
Tax-Free Income for Life: A Step-by-Step Plan for a Secure Retirement by David McKnight
PowerOfZero.com (free video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com