Claiming SS early and investing it, vs. delaying for higher benefit
Many who look to claim benefits want to maximize the amount of money they will receive from Social Security over their lifetime, and the usual way to do that is to delay claiming as long as possible (not later than age 70). But for some, the goal is try to capitalize even further on their benefits by claiming early and investing payments received – however, the typical break even analysis doesn’t factor in that investment strategy on benefits claimed early. This article by Motley Fool’s Dan Caplinger appears at Nasdaq.com and illustrates how claiming early and investing can be a sound strategy, but only if you can attain a consistently good rate of return on your investment. In fact, claiming at age 62, saving those benefits and realizing a low investment return (e.g., 2%) can actually mean less in lifetime benefits. And that doesn’t factor in the other consequences of claiming early, such as benefit reductions due to exceeding Social Security’s earnings limit, income taxes on Social Security benefits, and eventual survivor benefits which will be dramatically affected by claiming earlier. To read the Nasdaq.com article about delaying your claim for Social Security benefits, versus claiming early and investing, click here.
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