When approaching retirement, one of the first things a Retiree may consider is turning on their Social Security benefit. According to Steve Vernon, a consulting research scholar in the financial security division at Stanford University’s Center on Longevity, in a new piece at Forbes, says this is not very beneficial, especially if a retiree is concerned with maximizing their retirement income.
“There are really only a few good financial reasons to start Social Security retirement benefits at age 62, the earliest possible age with the lowest monthly benefit, or soon thereafter,” Vernon writes. The few good reasons may be those that may be solely reliant on Social Security or a retiree that has been diagnosed with a life-shortening disease such as cancer or if you really have no need for the social security benefit at all.
A big no, no would be those that take Social Security Benefits in order to invest those benefits. Vernon advises against this practice as it comes with great risk those face investing in the stock market. “On the other hand, delaying Social Security benefits carries no investment risk at all,” he says.
Just because a friend or relative chose to receive their benefit early doesn’t necessarily mean you should. “Virtually every actuary, economist, and Nobel prize winner who has studied our Social Security system suggests that for most people, delaying these benefits for as long as possible (but not past age 70) is a good financial strategy,” he says. “And they’re basing their conclusions on extensive research and analysis, not just expressing uninformed opinions.”
There is a plethora of information available to retirees on the best strategies regarding Social Security benefits to maximize their retirement income.
“Knowledge about Social Security from informed experts is literally at your fingertips,” Vernon says. “Knowledge is power. More importantly, knowledge is money in the bank during your retirement.”
Read the full article at Forbes.
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