Claim Now, or Wait?

A bigger monthly cheque later only wins if you live long enough to collect it.

1 Two starting lines

💰

Claim at 65

Smaller monthly payment, but it starts right away.

⌛

Delay to 70

Bigger monthly payment, but nothing arrives for 5 more years.

2 Waiting grows the cheque

age 65 $713 / month age 70 $970 / month +0.6% for every month you wait

Each month of delay adds 0.6% to your payment. Wait the full 5 years, and it's 36% higher for the rest of your life.

3 But delay means empty months

age 65 age 70 claim at 65 5 years of payments banked delay to 70 $0 collected these same years

The early claimer has a 5-year head start in the bank. The delayed claimer is starting from zero, just with bigger deposits ahead.

4 So which wins? Track the running total

total collected 65 70 75 80 85 90 age breakeven: ~84 claim at 65 delay to 70

The early claimer's total leads for years. The delayed claimer's bigger deposits slowly close the gap, and overtake it at the breakeven age.

5 Before breakeven vs. after

Die before ~84

Claiming at 65 collected more, total.

Live past ~84

Delaying to 70 ends up ahead.

Nobody knows their own lifespan in advance, which is exactly why this is a bet, not a sure thing.