Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Deferring your Social Security benefit will increase your monthly benefit.
A worker can start receiving their benefit as early as age 62. Almost half of all workers elect this early date for a variety of reasons. However, the Social Security Administration increases the benefit each year that you defer by about 8 percent. Since benefits are payable for life for many people this delay will result in substantially increasing their total benefit.
Your Social Security benefits are particularly valuable.
For many the decision to defer benefits is the most important retirement income decision than will make. Almost two-thirds of retirees receive over half of their income from Social Security. Most retirees depend upon Social Security. The Social Security benefit is guaranteed and inflation adjusted.
Having a high inflation adjusted benefit is important.
Inflation is a major issue in retirement. It is payable to a worker and a spouse should the worker die. Retirees fret over loss of principle and low rate of return, however, inflation is the real enemy. Fixed income people often call me in distress because of an increase in their expenses that isn’t matched with an increase in income. Social Security adjusts the benefit annually in accordance with the Consumer Price Index.
The decision to defer impacts married couples the most.
For married couples the higher of the two Social Security benefits is paid after the death of the first spouse to the surviving spouse. Because many retirees do not have guaranteed lifetime income deferring is the easiest way to increase that guaranteed income. With increased income comes greater satisfaction in retirement.
Because the Social Security benefit is automatically adjusted for inflation it is very important to have the benefit set as high as possible to make the most of those adjustments. In fact that type of protection can rarely be purchased on the commercial market.
This critical decision is not difficult to evaluate and implement.
Once it is understood, deferring Social Security is really an easy strategy to implement. The easiest way to go about this is to just continue working. The worker doesn’t need to remain in their current job but full or part time work that you love and that provides all or most of your income needs makes delaying Social Security quite simple.
If married workers are both eligible for workers benefits under Social Security there are strategies that capitalize on the start dates. A retirement income specialist can help you work the math on this procedure but implementing this properly can result in a dramatic increase in Social Security benefits. The Social Security Administration also provides calculators on their website to help evaluate some of these approaches.
There are misconceptions concerning deferral of Social Security benefits.
As workers approach their eligibility dates they are sometimes distracted by a few things. The first thing is an understanding that their last day at work should be the same as their first day on Social Security. It is quite possible that that is neither true nor beneficial. The day that you stop work doesn’t need to have any bearing on the date you start receiving benefits.
Another misconception is that if a worker doesn’t start benefits as early as possible they might lose out when Social Security fails. It is unlikely that Social Security will fail and to file early might result in the worker actually getting less.
Some workers gamble that they will not live to normal life expectancy (which is the basis for most social security calculations.) That is an extremely poor gamble since losing puts you in a lower income for an even longer time if you live past life expectancy. Another consideration is that your spousal benefit will be much less should you die before your spouse.
While most of the time the worker that defers gets a better “deal” and the spouse of that worker gets an increased benefit if they survive the worker, there are situations where not deferring the benefit is the best strategy. The time when that is always true is when the worker reaches 70. There aren’t any increases available after 70. Another situation where not deferring benefits would work to the advantage of the participant is when the worker is single and has a much less than expected life expectancy due to illness or injury. IF you aren’t in those categories you should at least weigh the advantages should you defer receiving benefits.
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A worker can start receiving their benefit as early as age 62. Almost half of all workers elect this early date for a variety of reasons. However, the Social Security Administration increases the benefit each year that you defer by about 8 percent. Since benefits are payable for life for many people this delay will result in substantially increasing their total benefit.
Your Social Security benefits are particularly valuable.
For many the decision to defer benefits is the most important retirement income decision than will make. Almost two-thirds of retirees receive over half of their income from Social Security. Most retirees depend upon Social Security. The Social Security benefit is guaranteed and inflation adjusted.
Having a high inflation adjusted benefit is important.
Inflation is a major issue in retirement. It is payable to a worker and a spouse should the worker die. Retirees fret over loss of principle and low rate of return, however, inflation is the real enemy. Fixed income people often call me in distress because of an increase in their expenses that isn’t matched with an increase in income. Social Security adjusts the benefit annually in accordance with the Consumer Price Index.
The decision to defer impacts married couples the most.
For married couples the higher of the two Social Security benefits is paid after the death of the first spouse to the surviving spouse. Because many retirees do not have guaranteed lifetime income deferring is the easiest way to increase that guaranteed income. With increased income comes greater satisfaction in retirement.
Because the Social Security benefit is automatically adjusted for inflation it is very important to have the benefit set as high as possible to make the most of those adjustments. In fact that type of protection can rarely be purchased on the commercial market.
This critical decision is not difficult to evaluate and implement.
Once it is understood, deferring Social Security is really an easy strategy to implement. The easiest way to go about this is to just continue working. The worker doesn’t need to remain in their current job but full or part time work that you love and that provides all or most of your income needs makes delaying Social Security quite simple.
If married workers are both eligible for workers benefits under Social Security there are strategies that capitalize on the start dates. A retirement income specialist can help you work the math on this procedure but implementing this properly can result in a dramatic increase in Social Security benefits. The Social Security Administration also provides calculators on their website to help evaluate some of these approaches.
There are misconceptions concerning deferral of Social Security benefits.
As workers approach their eligibility dates they are sometimes distracted by a few things. The first thing is an understanding that their last day at work should be the same as their first day on Social Security. It is quite possible that that is neither true nor beneficial. The day that you stop work doesn’t need to have any bearing on the date you start receiving benefits.
Another misconception is that if a worker doesn’t start benefits as early as possible they might lose out when Social Security fails. It is unlikely that Social Security will fail and to file early might result in the worker actually getting less.
Some workers gamble that they will not live to normal life expectancy (which is the basis for most social security calculations.) That is an extremely poor gamble since losing puts you in a lower income for an even longer time if you live past life expectancy. Another consideration is that your spousal benefit will be much less should you die before your spouse.
While most of the time the worker that defers gets a better “deal” and the spouse of that worker gets an increased benefit if they survive the worker, there are situations where not deferring the benefit is the best strategy. The time when that is always true is when the worker reaches 70. There aren’t any increases available after 70. Another situation where not deferring benefits would work to the advantage of the participant is when the worker is single and has a much less than expected life expectancy due to illness or injury. IF you aren’t in those categories you should at least weigh the advantages should you defer receiving benefits.