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{NEW STUDY} Should you wait for Your Social Security Benefits?

Darryl Rosen • Jan 13, 2023

A new study published in the Journal of Financial Planning says delaying Social Security helps combat longevity risk by providing inflation-adjusted lifetime benefits for a retiree and a surviving spouse.

The report by the co-directors of the Center for Retirement Income at The American College of Financial Services, concludes that monthly benefits will be 77% larger in inflation-adjusted terms for those who claim at 70 instead of at 62.
The idea that an early claiming decision provides retirees with the opportunity to invest their benefits to grow and support better retirement outcomes has grown in popularity in recent years. However, the study’s authors say this thinking overlooks several important points about retirement income, most notably that “retirees may not invest this aggressively, and retirees must fund spending from assets and do not experience simple time weighted returns.”

In other words, to generate the returns needed to beat the benefit of delaying Social Security, retirees would need to substantially raise their risk tolerance levels and set much more aggressive asset allocations.

Do you really want to do that? 

Could you commit to doing that? 

Would a few extra dollars really increase your enjoyment in life?

Look, it’s hard making predictions, especially about the future but unless you know something specific about your life expectancy - in that it’s not the best - it’s best to wait at least until full retirement age or beyond to start collecting social security.

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