Should You Wait to File for Social Security Retirement Benefits?

January 8, 2014

Individuals who are nearing their early retirement who have largely stopped working have to decide whether to file for early retirement benefits or to delay taking benefits.  Whether to file or delay is a significant decision and it is impacted by many factors.  The thinking for healthy individuals who have a reasonable life expectancy is that they should wait.

The New York Times agrees.  Financial writer Tara Siegal Bernard writes:  Think about it this way. If you delay collecting your benefits, which can be claimed anywhere from age 62 to 70, the money you leave on the table each year is basically a payment for a much higher stream of lifetime income. And that money will buy significantly more income, perhaps 50 percent more for a couple, than buying an annuity through a commercial insurer.

“It’s almost a no-brainer,” said Steven A. Sass, program director of the Financial Security Project at the Center for Retirement Research at Boston College, who analyzed the numbers. “Depending on how long you delay, you will get an income equal to about 6 percent or more of the savings used to produce that income. You will get that income, rising with inflation, with no risk, sent to you by the U.S. government.”

Delaying benefits requires leaving sizable sums of money on the table, which, for many sixty-somethings, could be too difficult — psychologically or financially. Some want to start collecting what they’re owed, while others simply need the money to live on. And individuals who aren’t healthy should clearly start collecting benefits as soon as they’re eligible.

The full article is here:


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