Social Security

How to Optimize Your Social Security Benefits

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by Alli Thomas

Sep 30, 2019

One of the biggest decisions retirees face is when to start taking Social Security benefits. Even professional opinions run the gamut from “take it early so you can enjoy retirement while you’re still in good health,” to “wait as long as you possibly can,” to “don’t even think about touching it until you turn 70.”

 

So which one is the right choice for you?

 

You may not be surprised to hear that waiting until you’re 70 may be most beneficial. A new report from Capital One and United Income back up this claim with real, hard data.

 

Here is what the report found:

 

  • Retirees who waited to take Social Security benefits until age 70 would enjoy about a 9 percent increase in their total expected future income.
  • The average household would see an annual income increase of about $3,400 per year.
  • Over their lifetime, retirees who start taking Social Security too soon lose more than $110,000 in benefits that they otherwise could have received, had they waited until age 70 to start collecting.

 

These are some significant numbers!

 

Let’s say you waited until 70 to start Social Security. What would be your trade-off?

 

The report suggests that, for those who delay their benefits, overall wealth would almost certainly decrease during their 60s and 70s.

 

This means that, in order to cash in later, your wealth must take a short-term dip.

 

Is potential future gain worth short-term financial loss?

 

The answer to that question may depend on a few factors.

 

First, how is your health? Does your family have a history of terminal illness or early death? If you’re in poor health or you have a family history of premature death, taking Social Security earlier may be the best choice.

 

Also, what kind of savings have you accumulated for retirement? If you have a nice-sized investment account, you may not worry about the short-term money struggle of delaying Social Security benefits. You could live off of your investments until your benefits kicked in at 70.

 

Have you decided what your best Social Security strategy is? Are you struggling with trying to make sense of it all? If you’d like to get a second opinion, click here to set up a no-cost, no-obligation meeting with one of our financial advisors.

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Alli Thomas

Alli Thomas has worked in the financial services industry for nearly 20 years, with a focus on retirement-related investing. She began her career as a FINRA-licensed participant-services call-center associate at Vanguard, and then moved to Principal Financial Group, where she worked closely with employers, assisting with retirement plan set-up and design, selecting appropriate plan investment offerings, and maximizing employee participation through targeted education campaigns and enrollment meetings. Alli has also worked as a qualified 401(k) administrator and registered investment advisor for several small investment firms. She now writes about all things investment- and finance-related, leveraging her extensive experience and passion for retirement planning to help investors make well-informed financial decisions.

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2 Responses

  1. Avatar Theresa C. Astran says:

    Yes, I would agree today that it would have been wiser for me to hold off. However, my health was not good at the time and i was “somewhat” ill advised because of my condition at thst time. I’ll discuss with my FA what would seem best at this point. Do keep me UTD on SSA benefits and/or otherwise. Thank you.

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