Texas Data Centers ‘Dug Their Own Grave,’ Gov Says. At 63, a Rancher Can Lease His Land and Give Social Security More Time to Grow.

Texas Data Centers ‘Dug Their Own Grave,’ Gov Says. At 63, a Rancher Can Lease His Land and Give Social Security More Time to Grow.

Gerelyn Terzo

Sat, September 19, 2026 at 5:01 PM GMT+3 6 min read

Quick Read

• Gov. Abbott says Texas data centers "dug their own grave" by expanding too fast, with fewer than 10% responding to a state electricity demand survey.

• Claiming Social Security at 63 instead of 67 permanently locks in just 75% of the full benefit, costing a $2,500 earner roughly $625 monthly.

• A long-term ground lease can bridge the income gap to delay Social Security claiming, and passive rental income generally avoids the Social Security earnings test.

• Two retirees, same $1 million, same 4% rule, buy one finished with $1.4 million, the other hit $0 in 12 years. Our free reader guide explains the flaw that separated them, and the income-first method built to avoid it.

Texas spent years courting the data-center boom. Now Gov. Greg Abbott says the industry "dug their own grave" by expanding too quickly without winning over the communities expected to host the projects. The backlash is real.

Fewer than 10% of data-center companies responded to a state request for information needed to forecast future electricity demand, according to Abbott, and Texas has begun auditing projects seeking grid connections. Nationally, 61% of Americans now oppose construction of a new data center in their area. None of that eliminates one thing developers still need in Texas: land.

Picture a 63-year-old West Texas rancher offered a long-term ground lease on acreage he has no intention of selling. The developer gets the site. He keeps the ranch and starts collecting rent. That income could give him something particularly valuable at 63: enough room to leave work without immediately turning on Social Security.

The 4% Rule is Broken, Built On A World That No Longer Exists

Every retiree knows about the 4% rule, but it frames retirement as a slow liquidation and still causes retirees with seven-figure accounts to agonize over a dinner out.

There's a different way to run the math that makes more sense today. Build an income floor — dividends, interest, and Social Security that cover your essential bills every month — and you never have to sell shares into a down market just to pay them.

Our free reader guide, The 4% Rule Is Broken, walks through it in about 15 minutes. Access the report here.

Four Years Can Change the Social Security Check

For someone born in 1960 or later, full retirement age (FRA) is 67. Starting Social Security at exactly 63 generally pays 75% of the FRA benefit. A worker entitled to $2,500 a month at 67 would receive about $1,875 if he files at 63. Waiting does not mean the benefit is earning delayed retirement credits during those four years. Those credits begin only after FRA. From 63 to 67, the increase comes from avoiding more of the permanent early-claim hit.

After 67, waiting can increase the benefit further, reaching 124% of the full benefit amount at 70. A recurring land lease changes the practical question. If rent can cover a meaningful share of living expenses, the rancher may no longer need Social Security simply because the paycheck stopped. The ground lease becomes a bridge.

Keep the Land and the Income Stream

That is different from selling acreage outright. A long-term lease can preserve ownership while turning part of the ranch into recurring retirement income. Depending on the agreement, payments may also rise over time through contractual escalators. And ordinary real-estate rent generally does not become net self-employment earnings merely because the owner is collecting it. Social Security excludes real-estate rental income in most cases unless the owner is a real-estate dealer or regularly provides substantial services primarily for the occupant's convenience.

That distinction still matters if the rancher decides to claim Social Security before 67. Passive rent generally stays outside the retirement earnings test, while wages or net self-employment income can trigger benefit withholding. But that is no longer the most interesting reason to care about the lease. The bigger advantage may be that he does not have to claim yet at all.

Retirement Math

Ground rent is not invisible to the tax return. Rental income generally feeds adjusted gross income, which can affect how much of Social Security becomes federally taxable after benefits begin (it is one of several quiet IRS rules that drain retirement accounts, and we mapped the rest in a free tax trap guide).

At 63, health insurance adds another consideration. A retiree using Marketplace coverage before Medicare may find that a large lease changes eligibility for premium tax credits because those subsidies depend on household income. Then Medicare arrives at 65. Income-related Part B and Part D surcharges generally use tax-return information from two years earlier, so a large lease beginning at 63 can potentially show up again in the Medicare calculation. None of that makes the lease a bad retirement asset. It means the rent should be modeled as part of the retirement plan, not treated as free money sitting outside it.

Decide What the Land Can Buy Besides Rent

Before signing a decades-long ground lease, three pieces deserve attention alongside the headline payment.

1. Price the Social Security bridge. Compare what the benefit would be at 63, 67 and 70, then see how many years of living expenses the lease can realistically cover.

2. Model the after-tax rent. Include the effect on Marketplace subsidies before 65, Social Security taxation after claiming and potential Medicare surcharges.

3. Protect the long-term value of the acreage. Escalators, renewal rights, restoration obligations and exit terms can matter long after the first rent check arrives.

Texas data centers may be having a harder time winning over their neighbors. For the rancher willing to say yes, the land can do more than produce rent: it can buy him time to make the Social Security decision on his own clock.

Before Your Next Withdrawal, Run One Number ( It's Not The 4% Rule Everyone Knows)

Take your essential monthly expenses and subtract your guaranteed income — Social Security, plus any pension. What's left is your income gap, and how you close it determines whether retirement runs on share sales or on a paycheck your portfolio writes you every month. Our free reader guide, The 4% Rule Is Broken, shows exactly how to close that gap with portfolio income: a worked example (one retiree needed about $480,000 in income-producing assets to cover his essentials for good), an eight-point conversion checklist, and the 20-year numbers comparing dividends to withdrawals. It's free and takes about 15 minutes to read. Get the guide here before you take your next withdrawal.

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