WASHINGTON, D.C. – Waiting to take Social Security benefits after your full retirement age will increase your monthly benefits as much as 76 percent, according to a new toolkit, When to Take Social Security: It Pays to Wait, released today by the nonpartisan National Academy of Social Insurance (NASI) during America Saves Week.
The toolkit includes a 3-minute video, a 1-page fact sheet, and a 16-page brief to educate workers nearing retirement about the advantages of delaying their Social Security benefits beyond age 62, if they can.
“One of the most important financial decisions we make is when to start receiving Social Security retirement benefits,” said William Arnone, Chair of NASI’s Board of Directors and retired partner at Ernst & Young, LLP. “The gains from waiting are greater than they used to be. If you can wait until 70, your benefit will be 76 percent higher than if you had started at age 62.”
Key messages for older workers include: (1) If you need Social Security to make ends meet, take it. You’ve earned it. (2) But if you can wait, even a year or two, your monthly benefit will be higher – for the rest of your life. (3) If you are married, you have two lives to plan for. If you are the higher earner, waiting to take Social Security means a higher survivor benefit for your spouse if she or he outlives you.
“Because Social Security lasts for life and keeps up with the cost of living, it is often the biggest asset workers have,” said Virginia Reno, NASI’s Vice President for Income Security Policy. “The average benefit is a modest $1,296 a month. Yet to buy a guaranteed income of $1,296 a month that will go up with the cost of living and continue for a widowed spouse, a 65-year old would need to pay an insurance company, up front, about $388,000—far more than most workers have saved,” Reno added. If you think of Social Security as a key retirement asset, you may want to increase it by delaying when you start benefits, if you can.
Funding for the toolkit was provided by the Alfred P. Sloan Foundation and The Retirement Research Foundation.
The National Academy of Social Insurance is a non-profit, nonpartisan organization made up of the nation’s leading experts on social insurance. Its mission is to advance solutions to challenges facing the nation by increasing public understanding of how social insurance contributes to economic security.