In this article, I want to share some information on the benefits of waiting to begin Social Security. Industry research has confirmed that most retirees benefit from delaying Social Security payments. There are, of course, reasons why people don’t do this even though it might benefit them to do so. Some simply need the money now rather than later. Some have health issues which cause them to think they might not live to a very old age. And some have a bird-in-the-hand philosophy.
You can start receiving reduced benefits as early as age 62. However, the size of your monthly payments increases the longer you wait up until age 70. If you can wait until age 70, your monthly benefits will increase by 76% (compared to claiming at age 62). Couples have even more options by coordinating their start dates. I described a scenario that’s useful for many couples in a previous article entitled Strategies for Collecting Social Security Retirement Benefits.
If you’re able to wait, here are some of the reasons that delaying payments often makes a lot of sense. First, there are the higher monthly payments that I mentioned. Another very important reason to wait is that doing so will increase the chances that you’ll have enough income should you live to a ripe old age. Running out of money is a top concern of retirees and delayed Social Security can really help out here. Another reason to wait is that research has shown that Social Security returns are superior to annuities, bonds and equities in many ways. Finally, delayed Social Security benefits can help protect you against increased inflation and down markets. The very things that your other investments are not immune from.
Outside of these when-to-start considerations, Social Security payments can change if a divorce occurs or when a spouse dies. Guidepost Financial Planning can help you sort through your options. Please visit our website or give us a call at 970.419.8212 so that we can discuss your financial goals in a no-charge, no-obligation initial meeting.
This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products. Please consult your tax or investment advisor for specific advice.