Smart Money Waits for Social Security

10 September 2014
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10 September 2014, Comments 0

A new report by the Government accountability office outlines the benefits of delaying Social Security benefits as well as the challenges faced by those who claim benefits as early as 62. Those who delay claiming until their full retirement age tend to have greater income and wealth in retirement and rely less on Social Security than those who claim earlier. Households that delay claiming Social Security retirement benefits until the breadwinner’s full retirement age, have higher medium income and wealth in retirement than those who claim before the full retirement age. In fact, the analysis shows that those who delay claiming benefits until at least their full retirement age, had a median income soon after claiming that was 45% higher than households who claim before full retirement age. Interestingly enough, those who work in physically demanding jobs, such as blue-collar jobs, were 55% more likely to claim benefits prior to their full retirement age compared to those in all other occupations. Also, unemployed older workers were also likely to claim benefits as soon as possible. By waiting until age 70 to claim, benefits increased 132% of one’s full retirement age benefit amount. While claiming early provides retirement income at an earlier age, the reduction in benefits may cause these retirees to regret this decision if they live a long time.

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