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Financial Planning Social Security

Social Security: Delay Benefits at the Expense of Personal Savings?

By strategically choosing when and how to claim Social Security benefits, singles, divorced individuals and married couples can optimize their retirement income.

by Marty Allenbaugh | December 2014

With the exception of only the top income quintile, Social Security is the largest source of retirement income for all Americans.

While many retirees also heavily rely on their investments to provide income, they face a challenge in balancing their personal savings against Social Security benefits.

The problem is that retirees have two goals that often compete:

  • Obtain the highest Social Security benefits and, if married, the highest benefits for the surviving spouse. This generally entails delaying benefits, ideally to the latest possible age of 70.
  • Minimize savings withdrawals in the early years of retirement, particularly before 70. This generally entails taking benefits as early as possible.

However, since it is difficult for those who retire before age 70 to do both, investors should be looking for the best compromise for their situation.

Even for middle-income retirees, the outcomes can vary by hundreds of thousands of dollars. The free T. Rowe Price Social Security Benefits Evaluator tool (troweprice.com/socialsecurity) can help preretirees choose their strategy. Using that tool, a T. Rowe Price study examined some of the trade-offs involved, which depend on retirees’ marital status.

Singles

Unmarried individuals have fewer options than those who are divorced or married couples when balancing Social Security versus withdrawals.

Key to understanding all options is that initial Social Security benefits increase for everyone by about 8% (plus inflation) for every year recipients can delay benefits from age 62 to 70. Benefits can be roughly 75% greater at age 70 than 62. Also, for a retirement that could last until age 95 (T. Rowe Price’s standard planning assumption), stopping work at age 62 and taking Social Security at 62—as many do—can mean almost double the savings withdrawals versus working until age 70.

As a result, we recommend that singles work full- or part-time as long as possible—to at least age 66, if not 70—so as to delay Social Security benefits and limit savings withdrawals. There can be a very heavy price for delaying Social Security in terms of higher early savings withdrawals but, if working longer—even part-time—is possible, singles may be able to take benefits later and reduce withdrawals before 70. In the long run, they would be less likely to run out of savings, and their Social Security benefits would be larger.

The Divorced

Single individuals divorced after at least 10 years of marriage (and a two-year waiting period) have an additional option if they have not remarried: the “spousal benefit.” Even if their ex-spouses have remarried, the divorced party could delay their own benefits from age 66 to 70 by taking the spousal benefit for four years starting at 66. (Those who are divorced can take a lower level of spousal benefits as early as 62, but if they want to later switch to their own higher benefits, they must wait until age 66.)

At age 66—Social Security’s current full retirement age—the spousal benefit equals half of the ex-spouse’s benefit at the ex-spouse’s full retirement age. Ex-spouses do not yet have to be receiving their own benefits for the spousal benefit to be paid, but they do have to be at least age 62. (See the Social Security Administration website, www.ssa.gov, for details.)

Both ex-spouses, if single, can simultaneously get this benefit, unlike married partners who can’t get the spousal benefit at the same time.

Table 1 illustrates the annual sources of income for three of the strategies that married couples could use to take their Social Security benefits. The “split” strategy may provide a way for married couples to reduce their savings withdrawals before age 70, while still obtaining roughly the same lifetime Social Security benefits as under the “maximize” strategy.
The three strategies are:

  • Early: Both spouses—three years apart in age—retire when the higher-earning older one is 62 and the lower-earning younger one is 59. Each begins his or her Social Security at 62. As shown, this enables the least savings withdrawals prior to 70 of the three strategies but leads to the lowest lifetime Social Security benefits, the highest lifetime withdrawals, and the lowest survivor benefit.
  • Split: The lower-earning spouse takes Social Security at age 62. The higher earner takes spousal benefits at 66 and then his or her benefits at 70. This increases lifetime Social Security benefits by more than $340,000 over the early strategy, reduces lifetime withdrawals by the same amount, and increases the survivor benefit to the same level as under the maximize strategy.
  • Maximize: Both spouses wait until each is age 70 to take their own Social Security benefits. The lower earner takes spousal benefits at age 66. This strategy yields roughly the same Social Security benefits as the split strategy, but its pre-70 withdrawals are about $130,000 more.

Assumptions: A married couple, three years apart in age. The higher earner was born on 12/31/51 and earns $98,000; the lower earner was born on 12/31/54 and earns $68,000. (All ages in the charts are for the older spouse unless noted as the survivor’s.) They plan to replace 75% of their preretirement income, which would be $124,500 a year. All dollar amounts are in today’s constant dollars. Older spouse dies at 83; younger one at 95—thus, retirement period covers 36 years. Surviving spouse also needs $124,500 a year.

Table 1. Results of 3 Options for Married Couples

Strategy   Sources of $124,500  Annual Income
    Social Security ($) Savings Withdrawals ($)
Early Strategy
  62–64 21,978 102,522
  65–69 40,788 83,712
  70–82 40,788 83,712
  80–94 Survivor 21,978 102,522
Split Strategy
  62–64 — 124,500
  65 18,810 105,690
  66–69 31,350 93,150
  70–82 57,491 67,009
  80–94 Survivor 38,681 85,819
Maximize Strategy
  62–68 — 124,500
  69 14,652 109,848
  70–72 53,333 71,167
  73–82 71,787 52,713
  80–94 Survivor 38,681 85,819

  Early Strategy Split Strategy Maximize Strategy
  Total Withdrawals ($) Soc. Sec. as % Total Joint Lifetime (%) Total Withdrawals ($) Soc. Sec. as % Total Joint Lifetime (%) Total Withdrawals ($) Soc. Sec. as % Total Joint Lifetime (%)
Withdrawals to 69 726,126 16 851,790 19 981,348 22
Withdrawals 70+ 2,626,068 59 2,158,402 48 2,027,916 45
Social Security 1,127,788 25 1,471,808 33 1,472,736 33
Total Joint Income 4,482,000 100 4,482,000 100 4,482,000 100
Source: Estimated Social Security benefits from the T. Rowe Price Social Security Benefits Evaluator tool, available at troweprice.com/socialsecurity. Additional disclosure at the end of this article on page 34.

Married Couples

For married couples, there are seemingly endless variations in the trade-offs among initiating Social Security benefits, taking savings withdrawals, taking the spousal benefit and working longer. The T. Rowe Price study looked at three options: both partners taking benefits as early as possible; both waiting as long as possible to maximize benefits; and a “split” strategy that could provide joint lifetime benefits similar to the maximize strategy, but with lower early savings withdrawals. The box on here shows the results.

Significantly, the split strategy not only matched the maximum benefit strategy in terms of lifetime income from Social Security, but also could provide the same survivor benefit as the maximize strategy (the younger lower-earning spouse would receive the larger benefit of the higher-earning deceased spouse). And while the survivor benefit is often overlooked, we recommend that every married couple consider it. In the study, the higher earner is three years older than the younger lower earner, and the lower earner stops working at age 59. If the age gap were smaller, the split strategy would be even more advantageous. If it were larger, it would be less favorable.

Last, there are two other ways this couple could reduce lifetime withdrawals by more than 20% combined. Withdrawals could drop:

  • By 9% if the surviving spouse is able to live on three-quarters of the couple’s retirement income; and
  • By another 14% if both spouses wait to retire until the younger spouse turned 62 (and the older spouse turned 65).

Further assumptions and disclosures for this article and table: All results are in today’s pretax dollars, representing current purchasing power. Future Social Security benefits may be larger due to possible cost-of-living increases aimed at keeping up with inflation. The results of the T. Rowe Price Social Security Benefits Evaluator are estimates based on users’ inputs, situations and goals, as well as current Social Security law, formulas, and rulings, available from the Social Security Administration (www.ssa.gov). The results are generic and for illustration purposes only. The tool’s strategies are reasonable suggestions, not specific recommendations. Other reasonable strategies may exist for the information provided by the user. The results are not guaranteed by T. Rowe Price Investment Services, its parent companies, its affiliates, or its subsidiaries.

Discussion

Joe Snyder from GA posted over 11 years ago:

I recently did a spreadsheet comparing cash flow via investments vs. SSAN and find that you will have modest improvement in income after 85 by delaying SSAN to age 70. However, dying anytime before age 85 leaves more in your estate when you begin to collect at 66. This was true even conservatively assuming returns from personal investments were just 2% over inflation. The often touted 8% increase is misleading considering you also forgo any SSAN income for 4 additional years. It takes you until age 85 just to catch up.


Randell Rude from MD posted over 11 years ago:

Very helpful article. Thanks.


Bill from VA posted over 11 years ago:

I have to preface this by saying I get a little tired of hearing that all should wait till age 70 to start collecting SS. My wife - 63 - and I -64 - retired 2 years ago. We started collecting SS immediately, for a total of $47,000 a year. We also collect $16,400 in pension benefits, and my wife works a part time job for fun, which generates another $8,000, for a total annual household income of $71,400. We have no house payments, and a portfolio in the 7 digits, which we let the income reinvest. We have actually not needed to do any withdrawals from the portfolio. I find that through tax savings, $70,000 net a year provides adequate income. Last year federal taxes were $1400, and Va were $0. When our RMDs start tapping in a few more years, the tax party will be over, but for now that works for us. I would estimate that our RMDs - which will increase our Soc Sec taxable income - from presently $16,500 of the $47,000 to $40,000 - and other investment income to an amount that after taxes won't really result in much more than the present $71,400. So what I am saying is that one really needs to analyze the numbers from all angles. Hope the IRS doesn't subscribe to AII and read this. Good luck.


Joseph Gal from CA posted over 11 years ago:

Financial Engines has a tool that does social security monte carlo simulations that determine the best options for you to maximize income over your lifetime: http://corp.financialengines.com/individuals/retirement-readiness.html


Daniel Brown from TN posted over 11 years ago:

There's at least 1 more grouping of individuals that should be included. Widow(er)s. Particularly when both of the spouses have had substantial earnings. My wife died in 2007, at age 56. I began taking HER SocSec in 2013, when she would have turned 62. I'll continue that until I turn 70, when I'll drop her SocSec and begin drawing my own. This plan was developed by a SocSec advisor, and confirmed by others.


Peter B. from NJ posted over 11 years ago:

I hope for the day when these types of articles consider another factor important to some investors although admittedly not all. The studies I have done focus on after-tax net income. People with traditional deferred accounts (e.g. traditional IRAs and 401K) will face minimum required distributions (MRDs) starting age 70.5. If the MRDs are significant compared to total other income they can easily push you into a higher tax bracket once reaching age 70. So, does one defer receiving social security to increase the pre-tax SS dollars one starts receiving just in time to be taxed at a higher rate due to MRDs? Or does one start SS earlier and "enjoy" the added income and lower tax rate until reaching age 70? When I studied this I found that starting SS at age 62 made a lot of sense for a wide range of age-at-death. Starting SS at age 70 made sense if one expected to die at somewhere between 95 and over 100 depending upon assumptions. Starting SS at age 66 is the best option over only a small range of age-at-death. By the way - the social security administration also has a great customizable benefits calculator.


William Warren from IL posted over 11 years ago:

I started collecting when I turned 66 and my wife started collecting her spousal benefit when she turned 66 some months later. I continued to work until 68.5 (there is no earnings limit once one reaches "full" retirement age). That meant that 85 of our SS was taxed, but it still was after I retired even before RMD's were required because I am fortunate to have a pension. Continuing to work after age 66 enabled me to pay off the house mortgage and buy 2 new cars before retiring. Our monthly expences are affordable without mortgage or car payments, and my next new car will be funded by the RMD's.


Robert Kraft from NE posted over 11 years ago:

Wow, this needs to be looked at more carefully, from the above comments. Thanks for posting them.


Steve D from NY posted over 11 years ago:

The number are not complete. The Split says: The lower-earning spouse takes Social Security at age 62... But if you look at Table 1. the row for 62-64 is blank in the the Social Security. It should have a number.


Stan M from MI posted over 11 years ago:

After running the numbers, I found the break even point to be about 17 years. That is, if I delay starting to receive benefits until 65, vs. 62, I will not catch up to the total income until age 82. After that, i.e., from age 83 until I die, the delay strategy wins. But 17 years is a long time, and the calculations did not include return on investment if I were to take the income and buy a good mutual fund. Alternatively, it doesn't take into account the cost to my portfolio to replace the income for several years. So, I applied to start at age 62. Guess what. Right on the S.S. web page application, it tells you that based on life expectancy tables your net total income will be the same no matter when you start collecting. Seems to me that delaying is betting you'll be one of the winners and live longer than the longevity tables say is the average (or is it the mean?).


BB from OK posted over 11 years ago:

One thing you should consider before delaying benefits is quality of life beyond a certain age. Having watched my parents throughout their retirement years I have come to realize that after a certain age (and this age is different for different people) you just don't feel like doing that much. My parents traveled a lot in their early retirement years, but now as they begin their 80's the only traveling they do is to doctor appointments. I'm glad they took early retirement and enjoyed it while they could.


Fred Evans from TN posted over 11 years ago:

Another wrinkle some folks face is the Windfall elimination provision (WEP) and the Government Pension Offset (GPO). This is a penalty for anyone that recieves a pension from a non profit employer and have not paid into SS for at least 30 years. My wife had jobs where she paid into social security for 23 years then worked for a school for 13 years where she did not pay SS. In our case she has her earned social security was reduced by 30% and she will recieve a greatly reduced social security payment when I die because she has a good pension which was mostly paid by her payroll deduction and a large lump sum we paid on her retirement. Our strategy is to take her SS early (age 62)along with our 4 pensions. I will take a spousal at age 66. This will keep our income relatively low so we can convert IRA to roths up to age 70 when I will take my SS which will be the max payable because I paid the max for most of my career. This strategy will help me move some of our extremely large IRA (IRAs plus converted 401k, 403b,457)out before we reach min withdrawl and my social security which would otherwise push us into a higher tax bracket.


Charles Rotblut from IL posted over 11 years ago:

Steve, All ages in the charts are for the older spouse unless noted as the survivor’s. In the split strategy, the younger spouse is initiating benefits at age 62 when the older spouse is turning age 65 (the age displayed in the chart). -Charles


David Hartley from NJ posted over 11 years ago:

Maybe I'm missing something, but don't understand why you have "80 - 94 Survivor" when the older spouse dies at 83. Calculating the numbers you also include 80 - 94 when I believe it should be 83 - 94.


Charles Rotblut from IL posted over 11 years ago:

David, The spouse is three years younger and would start taking the survivor benefits at 80 after the older spouse passed at age 83. -Charles


Dan from FL posted over 11 years ago:

If I am still earning a high income at age 70 and my wife who was born the same year as me is retired I can see not benefit in any strategy but waiting until we are 70. The alternative is to pay the maximal tax rate on any social security income. Has anyone addressed this?


Harlan Stueven from CO posted over 11 years ago:

It seems there are so many variations. In our case, I am only 18 months older than my spouse but I was the primary breadwinner. So her SS benefits are minimal unless she takes spousal benefits but then our total SS benefits are lower for several years (until I turn 70) per the T Rowe Price example. The calculators do not take into account the lost investment value of monies you have taken out of your IRA or lost investment value of monies you could have invested from a SS payout.


Vicki from TX posted over 11 years ago:

I second the info about WEP and GMO for people (especially teachers) who might have worked at other jobs and paid into SS yet retire from an agency where there was no SS requirement. Most Texas teachers are not paying into SS--but the state's teacher retirement system. When I took early retirement about 10 years ago, there was a workaround available to shelter your spousal SSA eligibility. I retired early specifically to use that workaround provision in SS law which will enable me to receive a full spousal portion and not pay a penalty. My own personal SS annuity is low because most of my earnings come from teaching. There were people who retired after teaching or working in education for 20+ years and did not know they needed to protect their ability to file/draw a full spousal pension from (usually) husbands' earnings. Many of them were counting on their spousal portions to supplement their pensions from TRS--but their districts were not that helpful in explaining that penalty. Now many people with careers outside education have come into it as teachers after years of paying into SS and will be very unlikely to receive either their full SSA on their own earnings or full spousal amount...


Jerry from IL posted over 11 years ago:

What would the best strategy be if the primary wage earners started taking SS at 62 and the non-earning spouse is soon to be 66. When should the spouse begin SS.


Gerald Pattison from MN posted over 11 years ago:

Think about another variation as to when you start taking SS - Start it while you are still working and be disciplined enough to put the money straight into savings, preferably into a Roth so you will never pay taxes on the earnings. You will have to pay taxes on the income each year while working however. If you work at your savings/investments a little you can earn more than the 8% that your SS supposedly increases with time and keep earning until you withdraw, even in your 90's if you need to.


Gerald Pattison from MN posted over 11 years ago:

Note about taking SS while still working, you pay a tax rate based on your income each year. Once you put whats left over in a Roth you will pay no taxes and so can recover the amount lost to taxes. Further more you keep earning on the money in a Roth till you need it and DO NOT HAVE TO WITHDRAW AND PAY TAXES required by the tax code each year after you reach 70 1/2, If you had your savings in an IRA you would have to withdraw money that you also made with earnings on your investments. You can wait till you are 90 if you choose and will have earned even more interest, but do not have to pay taxes on any of it.


Rob from MN posted over 11 years ago:

I will be 67 mid-2015. My wife will turn 53 late 2015. We both continue to work. The age difference affects the strategy. The T Rowe Price tool is not effective for age differences greater than 6 years. Do you have a suggestion on running calculations to estimate the cost/benefit using the different approaches. Thanks


James Noran from VA posted over 11 years ago:

Two really good points in the above group of comments. One, for a traditional IRA in 7 figures, if one delays taking Social Security benefits, RMD's plus the higher SS benefits force one into a higher tax bracket than one would want at age 70 1/2. Better to start taking benefits earlier while you still have the flexibility to determine for yourself how much money you want to withdraw from your IRA each year, instead of the RMD rules forcing your hand. Second, from age 62 on, your quality of life is going to go down at least a little every year, so better to take the SS Benefits at age 62 and enjoy it while you can.


Aasheeta Parikh from Wi posted over 11 years ago:

i will be 66 in March, wife 59 in March. She does not work, I may work 2-3 more years I will have pension, RMDs from IRA, but no major non-retirement savings What strategies should we consider? We are in excellent health We don't need the money right now, since we have enough monthly cash flow from my work


Howard from NY posted over 11 years ago:

I am now 67 and my wife is 62. Fortunately we do not need the social security income as I had retired at 50 with plenty of savings and a large pension. My wife just retired at 62. We elected the "maximize stragegy" with a twist. At age 62 I purchased a 20 year term life policy on myself in the amount of $200,000.00 which was the approximate amount of Social Security that I would have collected between ages 62 and 70. The cost of the policy is approximately $135.00 per month. The difference in my social security benefit between 62 and 70 (without any COLA adjustments) is approximately $1500.00 per month. I have never seen the insurance angle discussed but if one is in good health and does not need the social security income until 70 it appears to be a "no brainer."


S Jackson from NJ posted over 11 years ago:

Here is a comment for the SINGLE folk with their relatively simple options: Even though Mr.X worked full time until past age 70, he began taking SS bens when he reached "full" age @ 66. Reasons: (1)"Get it while it's hot": in a collapsed economy, there was so much talk of a nearly bankrupt SS system, he wanted to grab whatever he could while it was still available. (2)He saved & invested the added income from SS, figuring (as did many married folk who offer comments)that the value of "present" well-invested $$ could be made to at least equal & maybe outweigh the value of the "future" extra SS $$ I would get after turning the age 85 break-even point. He proved right on that score, as the market has gone straight up ever since he began collecting & investing SS. What Mr.X FORGOT in his smart-ass calculations,unfortunately, was the impact of the SS payout on his ability to put away ROTH $$! Pretty stupid. Due only to the extra income from SS (yes! It does count!), his annual total jumped to exceed the income limits for Roth eligibility. So for each of the last few years he was working, he was deprived of the chance to put another $6,500 safely into his wonderful Roth--a deprivation which will prove very costly in the long run. Be careful if your annual income is in the vicinity of 100,000 near the IRA eligibility cut-offs!


David Hanna from AZ posted over 11 years ago:

The "Split" strategy has the lower-earning spouse taking SS at age 62. Table 1 shows no $ for this age bracket. Unless I am not understanding the strategy (which seems fairly straight forward) this analysis is flawed. It raises questions as to the whole analysis.


Charles Rotblut from IL posted over 11 years ago:

David, Table 1 is for "the older spouse unless noted as the survivor’s," hence the $0 number. -Charles


David Hanna from AZ posted over 11 years ago:

Charles, I don't think that is correct. See Max Strategy for ages 73-82; these are clearly for both spouses. The 80-94 is for the survivor. David


Helmut from WI posted over 10 years ago:

Have you considered the hit to the 8% you earn per year by delaying SS, during a period when there are no increases in SS. The hold harmless rule says if your having Medicare taken out of your SS there will be no increase in your Medicare premiums. But since your not collecting SS you will pay your Medicare premiums out of your pocket, and pay higher Medicare premiums. So its 8% minus X.


Charles Rotblut from IL posted over 10 years ago:

Note, as of November 11, 2015, T. Rowe Price’s Social Security Benefits Tool has been (temporarily?) disabled. The mutual fund company cited the impact of the new law (which ends file & suspend and restricted applications) as the reason why.


Ray Leissner from TX posted over 10 years ago:

Hey this story needs to be updated. For instance, soon no couple will be able to file and suspend one spouse's benefits and collect spousal benefits. One of the two will have to file and accept benefits, thus ending that spouse's benefit's growth. This will still allow the other spouse to get spousal benefits and allow their own SS to continue to grow until 70.


Charles Rotblut from IL posted over 10 years ago:

Hi Ray, I'm currently working on a new article about Social Security claiming strategies in light of the recent changes. -Charles


John Reed from CA posted over 10 years ago:

My decision process was not complicated, since I decided to spend X amount each year regardless of which option I chose. My question was: What return do I need to get on my investments to offset the extra Social Security Benefits I would obtain if I waited until age 70? I ran a spread sheet comparing the total amount I would get each year taking SSBs immediately, or waiting until age 70. I projected out to age 100. I found that I had to get about 8% to favor taking SSBs immediately. Since over the last thirty years I had earned an average IRR of 8.5% I decided to take my SSBs early.


Ron McNay from Red Bluff, CA posted over 6 years ago:

The best work I have seen on this was done by the Stanford Longevity Center. Their analysis was exhaustive. My take is that it is nearly always advantageous to spend savings while waiting for age 70.


John Neubauer from Alabama posted over 6 years ago:

Be careful. This article is out of date (2014) and needs to address the "Deemed Filing" rule because the strategy for split couples apparently is no longer allowed for couples just a few years younger.


Tom from MN posted over 6 years ago:

The sad thing is that the government and the bureaucrats have made claiming your money so difficult. The tough question of any retirement planning - when will you die. No one knows. In my case I could delay claiming SS and spend other resources until the later filing date. But what if I die the day before my filing date - nothing from SS and I have spent my savings so nothing for my wife. I decided to file for as much as I could as soon as I could. As it turns out because of a great stock market and wise (some luck) investing the portfolio has grown far more than I would have received from delaying SS filing. The portfolio is still in place, still growing and SS check still arrives each month. There is no right answer to these questions … but it is important to consider things other than just how can I get the most for SS.


Confused from VA posted over 6 years ago:

Why does AAII continue to push out these old/outdated articles? I've asked this before. In this article there are even posts from AAII acknowledging the need for updates/plans to do so. They also note that the author's firm T.Rowe Price had even taken their calculator off the market due to Tax Law changes. As so many comments make clear, there are dangers in using tables and calculators, especially for this type of analysis. So much of the financial industry relies on complex "Black Boxes" when some rather simple calculations might suffice. KISS. Also, the investment community is doing a disservice, especially to young people, in assuming/expecting/taking for granted that, in retirement, the retiree must "draw down" his/her portfolio - and the resulting worry about outliving retirement resources. Sadly, this may be true for many people currently facing retirement. But what does this say about how well they were advised and/or themselves managed their savings and investments? This needs to change and speaks to the "quality" (or lack thereof) of investment practices and advisers.


Julie from MN posted over 6 years ago:

As others have pointed out, this article and some of the strategies it recommends are badly out of date and no longer viable. I'm disturbed that AAII is publishing bad advice and annoyed that I wasted time reading it (and second-guessing myself--"hey, wait, did the law change back?").


Michael from Florida posted over 6 years ago:

Waiting to age 70 to capture the 8% increase per year that you'll get is probably a good strategy for most. But those with the discipline to take their benefit checks at 62 when first available and invest them, my calculations indicate you'll come out substantially better. Start with a check at age 62 of, say $1300 per month; apply a 2% COLA and that check becomes $1,523 by age 70. Meanwhile, invest all the checks from age 62 to 70 and earn a return of 10% on the investments (about the return of the S&P 500 for the past 10 years). This creates a capital investment account of $155,700. Now you can withdraw 4% from that account, add it to the Social Security check you're receiving and you'll have a larger monthly income than had you waited until 70 to receive SS benefit checks alone. PLUS, you'll have that capital account that continues to grow to leave to heirs or tap for emergencies.


mp massey from AR posted over 6 years ago:

I have noticed these 5 year and older articles still being sent to AAII members via email. You think it is current stuff only to see the date at the top. This article is over 5 years old. Not sure it is still accurate based on changes in the law since 2014.


Mark T. from KS posted over 6 years ago:

As far as I can tell, every single article I have ever seen concerning Soc Sec optimization strategies, the higher earning individual is older. For once, I would like to see an analysis where the lower earning individual is older.


Mike M from Texas posted over 6 years ago:

I was fortunate in that I could file and suspend and my wife able to take her spousal benefit and then claim her own age 70 benefit last year. Unfortunately, the Obama administration ended this. I used ESPlanner's Maximize Your Social Security to give me the best strategy which I used. I highly recommend the software since it can be tailored to your specific case and in current tax environment. One of the problems with all the estimates in the article is that it does not use IRR as the analysis basis which is really what you should use for a cash flow analysis. I would refer you to an excellent article by Michael Kitces who utilized this approach (https://www.kitces.com/blog/how-delaying-social-security-can-be-the-best-long-term-investment-or-annuity-money-can-buy/). Interestingly, he found that delaying social security when viewed as longevity risk insurance always recommends both spouses waiting till 70 which agreed with the ESPlanner result. Here is an interesting quote from the article regarding waiting to age 70. "In fact, the return is generally far superior to any risk-adjusted returns that can be achieved over comparable time periods by the available alternatives, whether investing in risk-free bonds, growth equities, or buying a commercially available annuity."


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