Social Security Strategies

Paul FennerRetirement Planning


I received an email recently to remind me to check my annual Social Security Statement.  Typically these statements would be mailed to you every year but the agency did away with that practice for most people a few years ago in order to cut costs. Setting up an online account is easy and you get to see more options compared to the previous paper statements that were sent.

I am of the opinion that most people should wait until they reach their full retirement age or beyond to collect their social security benefits.  Only in extreme cases where an individual or couple needs the money as a means to live on do I advise taking benefits early.  Typically in these situations, it is a result of poor planning or bad decisions that put people in these types of predicaments.

This NY Times article, The Payoff in Waiting to Collect Social Security does a great job in highlighting the reasons for delaying benefits.

  • If you delay collecting your benefits, which can be claimed anywhere from age 62 to 70, the money you leave on the table each year is basically a payment for a much higher stream of lifetime income. And that money will buy significantly more income, perhaps 50 percent more for a couple, than buying an annuity through a commercial insurer.
  • Delaying benefits requires leaving sizable sums of money on the table, which, for many sixty-somethings, could be too difficult — psychologically or financially. Some want to start collecting what they’re owed, while others simply need the money to live on. And individuals who aren’t healthy should clearly start collecting benefits as soon as they’re eligible.
  • But for people who are yearning for more sources of guaranteed income, this strategy — buying more income from Social Security — is especially attractive now when interest rates are low. Commercial insurers cannot compete on price, experts said, and they also have overhead that the federal agency does not.

See also this Crains’ piece on 10 ways to maximize Social Security benefits