When to claim Social Security

We made a good choice

Here is some information on when people claim social security for retirement. But other people are not you. When you claim depends on your circumstances and when you feel you will need the most income. As you can see, the most popular date is at full retirement age which is based on your date of birth.

Age 62 is popular presumably because individuals need the income, but it also provides the lowest monthly benefit. It is actuarial reduced.

The longer you delay, the higher your monthly benefits.

Excerpt from USA Today article

Delaying to age 70 generates higher income.

However, in my opinion, there is no compelling case based on the most money collected over your lifetime. What is most important is the highest monthly income when you need it most to live on. Maximizing survivor benefits may also be a goal.

What you collect in total over your lifetime is irrelevant. Social Security is insurance and a annuity, it is not an investment.

One comment

  1. Studied this extensively.

    Social Security benefits are a base level of income in retirement – for almost all Americans, the income from Social Security is not sufficient to cover everyday expenses.

    So, many people look to find other sources of guaranteed income.

    My recommendation is that the optimal amount of guaranteed income is that amount sufficient to cover everyday expenses. That frees up other assets to meet shock expenses, as well as to be used for legacies, and unique spending in retirement.

    So, if you are going to buy an insurance policy to provide additional guaranteed income, you should first consider “purchasing” more guaranteed, inflation-indexed income by using some of your assets to “bridge” and delay commencement of Social Security.

    Social Security offers the most cost efficient (lowest expense) form of guaranteed, inflation-indexed income available to Americans, that also incorporates a unique surviving spouse benefit.

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