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  • Writer's pictureSteve Coker, CFP

Maximizing Social Security

It is tempting to start taking Social Security Retirement benefits as soon as possible but making the most of Social Security often means waiting. Delaying Social Security Retirement benefits provides increased income for life, and based on life expectancy, results in a much higher cumulative benefit.

The table below provides an example. A maximum earner claiming at age 62, the earliest possible age, would receive $2,348 in monthly benefits. But waiting until Full Retirement Age of 67 would increase the monthly benefit to $3,354 per month – a 43% increase. Over time this increased benefit adds up, resulting in more than $280,000 of additional benefits over life expectancy.

Of course, the difference depends upon how long the retiree lives. Still, the breakeven age, where the retiree will be better off for waiting, is 77. Any monthly benefits after that age represent extra funds from the government. Equally as important for a married couple, this higher benefit will become the survivor benefit for the longer living spouse, meaning that if either spouse lives past 77 there is a positive benefit to waiting.

What are the odds of living past the age of 77? Absent some type of health concern, the probability of an individual age 62 living to at least age 77 is 80%! For a married couple the odds that at least one will live to the age of 77 is 94%.

Waiting until age 70 increases the benefit even more, but the key message is that maximizing Social Security often simply means waiting. If you would like to review your situation, then give us a call. We would be happy to walk through the numbers to review your specific situation.


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