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Delaying Social Security: Risk vs. Reward - Moneywise
Most financial advisors will suggest that waiting for a higher Social Security benefit is a wise strategy, yet very few seniors actually heed that advice. In fact, only about 10% of all SS beneficiaries maximize their Social Security benefits by waiting until age 70 to claim, despite knowing that SS benefits at age 70 are 76% more than when taken at age 62 (the minimum age). So yes, the reward of waiting longer to claim is substantial, but what are the risks? Well, for one thing, short life expectancy is a risk. If life expectancy is expected to be short, then you might actually end up collecting less total benefits by waiting to claim that higher amount. And if you have scant retirement savings, you may just need the SS money sooner. On the flip side, if you expect to live a long, healthy life, and you have some savings to tide you over, then that higher monthly SS payment will sure come in handy as you age. But there is no one formula that works for everyone, so carefully evaluating your claiming options is the best advice, as explained in this Moneywise article by Monique Danao.
One final note: waiting for a higher SS retirement benefit can also benefit a surviving spouse, because a widow(er) gets the higher of two benefits – their own, or the the amount their deceased partner was collecting at death. If the deceased partner waited to claim a higher amount, the spouse will benefit therefrom.
Also, if you’re unsure about how these basics apply to you, or if you have any questions about your individual situation under Social Security, note that the AMAC Foundation provides a free-to-the-public advisory service to help Americans navigate the complexities of this program. All questions are answered quickly, at no charge. Learn more about it here…