Want to know why delaying Social Security may be a great idea? Today we will focus on what happens when you begin taking benefits late instead of at normal retirement age (66 and some months or 67 for most people).
As mentioned in a previous blog post, the latest an individual can have Social Security benefits is 70. Waiting until age 70 would result in your benefits being up to 32% higher than if you were to begin at normal retirement age. The disadvantage is that a premature death would result in a small cumulative Social Security benefit, meaning you wouldn’t have fully taken advantage of this government program that you’d been contributing to for most of your life. A big advantage presents itself for those that expect to have longevity. If your family has a history of living longer or you are a very healthy individual who is likely to experience longevity, the total benefits of the larger Social Security payouts can be significant over time. (See how your benefit is affected by using the Social Security Early or Late Calculator.) If you take Social Security between 66/67 and 70, your benefit will be increased by 8% each year that you delay.
Life expectancy, investment assets, and financial goals are some of the factors that should be considered when choosing the age of beginning Social Security. For more on Social Security, be sure to attend one of our courseshere. If you would like a Social Security optimization report and personalized retirement advice, please book a consultation with a Lockheed Martin Retirement Specialist!