Social Security Age Gamble
According to many financial advisors across the globe, people would be better off waiting until the age of 70 to start claiming social security. They have compared the benefits in the 70s to that of the 60s. The reason behind this advice is that the government has guaranteed an 8% increase in lifetime payments for each year in which they delay. It has a maximum limit of 70 years. The only missing point is the possibility of payoff.
The conversation is not about social security running out of money to fully fund the benefits. However, there is also speculation about the same. It means that early people will enjoy living longer than those who start late in life. From a standpoint, social security is not designed to reward a sense of patience. It is designed to benefit each one equally. So, does it even matter when you start taking social security?
Affects on Social Security Age Gamble
Let us look at some points that will affect your decision at the starting phase:
Betting Against the House
Are you the kind of person who bets on a long shot because of the high payoffs? Well, if the answer is yes, then betting on that, you will out-live a morality estimate that does not make any sense. However, when you are deciding to delay social security, you are making a bet.
Online social security benefits calculators are designed to help you make a choice based on the timing to leave the age of death assumption up to you. These calculators are good enough to describe the payoffs.
Beating the House in Social Security Age
It is often to lose proportions when you bet against averages that are based on the laws of a large number. If you have insider knowledge on personal characteristics, that may differ you from such assumptions, which are used to calculate social security benefits. You will be able to beat the odds.
Check if you have any such circumstances at your profile :
Biological Age
Research on the difference between the biological and the chronological age has started to impact the retirement planning process. A life span of plus or minus of 10 – 15 years, which may become common, will need to be incorporated into your decisions.
Gender
Social security benefits are completely based on ignoring gender and earnings history. At the age of 65, women, on average live 2.5 years longer than men do. There is a bias for women to delay Social Security, and those for men is to take it early.
Income
A recent study has proven that income has a positive effect on longevity. It is beneficial to take social security late for high-income earners and early for low-income earners.
Discount Rates
What is the expected rate of return on your portfolio? Lower return rates might be a favorite for social security at an early age. According to the previously mentioned SSA study, people who are born in 1952, the Maximised Claiming Age is never 70 at a return assumption greater than 5.9%.
