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 (AIG 1.08%), MetLife (MET 1.56%), Prudential (PRU 1.21%), 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.