Social Security – Should you bet that your life will be short?

Yes, you might get less over your lifetime if you claim later

Monthly benefits are set so that lifetime benefits are much the same no matter when the average person starts to collect Social Security.

– If you’re in poor health and unlikely to live as long as the average person, you’ll probably get less, over your lifetime, the later you claim. (That’s because you probably won’t get the highter monthly benefit long enough to make up for starting later).

But note: many whose health is poor still outlive the “average person”.

Should you bet that your life will be short?

No one really knows how long they will live. But if you health is OK, you’ll probably outlive the average person. If you’re married and both in good health, the odds are even greater that you or your spouse outlives the average person.

 

The cost could be quite high if you lose the bet and live “too long”. If blessed with long life, you might barely scrape by in your 80’s.

© 2009, by Trustees of Boston College, Center for Retirement Research


Does not represent the Social Security Administration.

Social Security – You don’t have to claim when you retire

You don’t have to claim when you retire.

Retiring and claiming are two different things. So if you have enough savings when you retire, you have two options.

– Start collecting right away. That’s what most people do.

– Delay and, while you wait, use a portion of your savings to live on. This option will draw down your savings more quickly, but increase the inflation-proof Social Security benefit you’ll get each month for the rest of your life.

Should you delay or claim right away?

No one wants to draw down all their savings. Savings are valuable as a reserve, can be invested in high-yielding assets, or left as an inheritance. But drawing an income out of your savings, over an extended period of time in retirement, can be tricky. So it could make sense to use some of your assets to live on and delay claiming Social Security.

– If you need to assure you and your spouse a higher basic income for the rest of you lives.

– If you will still have enough savings for “rainy day” emergencies.

© 2009, by Trustees of Boston College, Center for Retirement Research


Does not represent the Social Security Administration.