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Social Security: What You Get by Delaying Benefits

Millions rely on Social Security to make ends meet in retirement, and a large number of recipients take their benefits as early as possible. But that causes them to miss out on a great way to boost their future income.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the decision to delay Social Security benefits from a new perspective. Dan gives a simple example of how someone who had earned benefits of $1,000 per month if they waited until age 66 would only get $750 monthly if they take benefits at age 62. One way of considering that trade-off is to think of giving up four years of benefits at $750 in exchange for an additional $250 of income for the rest of your life. Dan points out that AIG (NYSE: AIG  ) , MetLife (NYSE: MET  ) , Prudential (NYSE: PRU  ) , and other companies offer such annuities, and you won't generally be able to get a $250 monthly annuity for just a $36,000 upfront payment. Dan recommends looking closely at these trade-offs to see if they make sense for you, especially given the positive impact that waiting has on survivors' and spousal benefits as well.

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Read/Post Comments (3) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 17, 2014, at 2:02 AM, kevinfong2000 wrote:

    Another choice:

    Do the math,

    if I retire at 62 I would get 1489/mth. that's 71742 in 48 mth.(62 - 66). if I retire at 66 I would get 1999/mth. that's a difference of 510/mth. to re-coop 71742 it would take 140 mth or almost 12 years or until i reach 78 (66+12) year 2028

    if I retire at 62 I would get 1489/mth. that's 142944 in 96 mth.(62 - 70). if I retire at 70, I would get 2653/mth. that's a difference of 1164/mth. to re-coop 142944 it would take 123 mth or almost 11 years or until i reach 81 (70+11) year 2034

    the life expectancy is 75 ? do the math.

  • Report this Comment On March 17, 2014, at 5:35 AM, doax wrote:

    Generally speaking it takes 12 years from the first receipt of any delayed SS payment to make up for forgone (deferred) payments. For example, if deferred until age 67 then breakeven is 67 + 12 = age 79 to breakeven. You come out ahead if you live longer than 79. If deferred until age 70 then age 82 to breakeven. Do not use average remaining life expectancy, use your family history of longevity and consider your life style and future medical advances. If you are "average" in terms of remaining life expectancy then it does not make any $ net present value difference when you start taking deferred payments (without consideration of how SS $ received are deployed....e.g., invested versus spent).

  • Report this Comment On March 17, 2014, at 11:54 AM, clchapman wrote:

    I see these articles all the time.

    Maybe my wife is the exception and SS is just out to get her

    She signed up for ss at 62 she was getting 950 a month

    She stopped and paid it all back and continued to work until she was 641/2 .She is not restarting her benefits until Aug when she will be a month or so shy of 66 Her increase is up to 985

    That is only a 35.00 increase for waiting three years

    only 50 more if she waits till 66

    This is right from SS as we have checked several times

    I do not know how others get the jump of 100's of dollars by waiting

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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