Carla Fried: Want another $100,000 or more for retirement? Follow this Social Security strategy
It's the rare household nearing retirement that doesn't have a few pangs of "will we be OK?" stress. Yet fewer than one in 10 retirees takes advantage of a
A 55-year-old woman making
For men, who don't live as long, the comparable numbers are
Even with getting checks for eight fewer years,
In 2017, less than 6% of women and 4% of men waited until age 70 to start drawing
A recent analysis from a money-management firm, titled "The Retirement Solution Hiding in Plain Sight," estimates that too-early claiming costs American retirees a collective
We're not hard-wired to want to wait. Among the behavioral biases that get in the way is our general aversion to delayed gratification. We also tend to "discount" actions that will only benefit us sometime in the future (delaying to age 70) when we can do something that feels good right now. There's also "loss aversion": the worry that if you wait, and then die early/earlier you will have lost out on what you could have collected.
Those biases aren't faults. The challenge is to acknowledge their existence and then work past them.
You probably should plan to live into your 90s
According to the
If you're in above-average health, the odds of living into your 90s are even higher. Of course, a medical condition you expect to shorten your lifespan may be reason to claim earlier. But move carefully. Married couples should always aim for the highest earner to delay to age 70.
Don't assume
If you're rolling your eyes at the delay strategy because you think
The bonus for delaying is more than you can earn in risk-free bonds
Monthly benefit increases the
Think you can do better claiming earlier and investing the money? Maybe. But the only way to pull that off is to take on investment risk. Ever since the financial crisis, the yield on the "risk-free" 10-year
You don't need to keep working full-bore
All you need to do is give yourself the flexibility to wait. Head over to the
This year the average monthly benefit - across all claiming ages - is about
Another option is to begin taking withdrawals from your 401(k) and IRA savings. This can work to your advantage given that a conservatively invested retirement portfolio isn't likely to produce the annualized gains you will get from delaying your
If you don't have a financial adviser, you can try Garrett Planning Network. No endorsement implied. We mention them because they're fiduciaries, meaning they have to put your interests first, and they'll work on an hourly basis. Learn more about what to look for in hiring a certified financial planner.
Married? The high earner delays to age 70
By all means, consider both of you delaying as long as you can. But the key strategy is that the spouse with the highest benefit should absolutely delay, and it is less important when the other spouse starts.
Why? A surviving spouse is entitled to just one
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