Three Reasons to Delay Your Social Security Benefits
There are good reasons for most Americans to delay receiving Social Security benefits until age 70, even it means living off your savings for a few years, says financial planner Luke Delorme.
Waiting to claim past the full retirement age of 66 is a great hedge against living longer than you expect, and running out of money, said Delorme, who is director of financial planning at American Investment Services, Inc.
It’s also a hedge against a drop in financial markets, where you may be storing your savings, he said. And if your savings are worth less because of inflation, you’ll still get more in Social Security benefits because they rise as inflation rises, he said.
Delorme, who is also a popular Daily Economy blogger and columnist for The Berkshire Eagle, spoke to a full room last week at AIER’s Summer Speaker Series.
He estimated that by claiming early at age 62, an American cuts their annual benefit by 25 percent. If they can manage to wait until age 70, they increase their annual benefit by 32 percent, he said.
“I’m willing to give up some liquidity, I’m willing to give up some of that pile of money that I have available during the early part of retirement, for a better likelihood my money will last a long time,” Delorme said.
Nevertheless, there are some good exceptions to this rule, Delorme said. For instance, if someone is in poor health and doesn’t expect to live well past 70, it may pay to claim early, he said. If they need the money to survive, they may have no choice, he said. If they are a widow or widower, or were grandfathered in under the now-defunct File-and-Suspend program, there are other factors to consider, he said.
You can see the full video of his presentation above, or using this link.
American Investment Services, Inc., is wholly owned by AIER.
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