|Delaying Receipt Of Social Security Benefits Should Be A Targeted Strategy In Retirement Planning|
|Sunday, May 27, 2012 13:02|
Clients who put off taking their Social Security benefits not only get a larger check when they do start tapping the fund, they also end up buying an annuity that pays much better in today’s low interest rate environment than commercial annuities. The annuity benefit comes in the form of a benefit check that could be as much as 76% higher if retirees wait until age 70 to start drawing funds. This makes sense and the time to start planning is before clients retire.
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Planning in advance has tons of advantages and this is yet another. By planning to delay the receipt of Social Security benefits, you can help your clients build their other retirement savings to take up the slack until age 70.
Commercial annuities have marketing, asset management, and other costs to pay from the sales loads they receive. The increase investors get from waiting to draw benefits costs them nothing extra. Retirees can draw benefits from the fund anytime between ages 62 and 70. Some may choose to continue working until age 70. Others may tap 401(k) plans and IRA savings to cover their income needs until they start drawing Social Security benefits.
Another great reason to wait as long as possible before taking Social Security payments is to provide a larger benefit for spouses in case the primary beneficiary dies. With the low interest rate environment providing little in the way of income for retirees, utilizing retirement savings and waiting until age 70—if possible—to draw Social Security benefits may make a good deal of sense.