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Estate and Elder Law

A Recent Study on How to Outsmart Social Security


A savvy Sarasota or Bradenton Florida retiree can maximize their Social Security benefits by choosing to begin payments at just the right time. Eligible Sarasota and Bradenton residents who turn 62 this year must wait until age 66 to begin receiving full payments. But they can receive smaller payments beginning as soon as age 62, or plus-size payments beginning as late as age 70. Adjusted for inflation, monthly payments are 76% greater for a retiree who waits until age 70 than for one who begins collecting at age 62. Essentially, the individual forfeits money today in exchange for receiving a larger stream of payments in the future.

Annuity issuers have paid careful attention to rising life expectancies, because they increase the cost of providing lifetime payments. Social Security has made only minor adjustments to retirement ages. Some annuities even take individual differences in life expectancies into account. Social Security treats all comers equally.

The study was based upon Americans who turn 62 this year. Women in this group are expected to live to age 85.5 and men, 83.0. At most, women can increase the present value of their benefits by 18.3% by choosing the right starting point and men by 13.3%. 

The study found that gains from delaying Social Security payments are greater during periods of low interest rates, all else held equal. They're also greater "for married couples relative to singles, for single women relative to single men, and (at most interest rates) for two-earner couples relative to one-earner couples," according to the study. One overriding finding is that most retirees are best off waiting when "real" interest rates are below 3.5% -- in other words, when savers can safely earn no more than that amount after inflation. At the moment, real interest rates are zero, or less: Treasury bonds that adjust for inflation and have maturities of five to 10 years carry slightly negative yields. In other words, most retirees who don't need the money and aren't sure what to do should probably wait to begin receiving payments.


Single women maximize the present value of their benefits by waiting until age 70, so long as real interest rates are below 0.8%. But even when real rates are zero (which they are), single men should wait until only age 69, because of their shorter life expectancies. Singles who need the money earlier should generally avoid starting payments at either age 63 or 66.


For one-earner couples, the earner should wait until age 70 whenever real interest rates are below 2.5% (now), and not wait at all when they're above 5.3%. Assuming the earner waits until age 70, the non-earner should begin payments at age 66.

For two-earner couples, the difference in income matters. Suppose benefits for the low earner would be 75% of those for the higher earner at full retirement age (66 for the study group). At real interest rates of 0.6% and lower (now), both should generally wait until age 70 to collect worker benefits, and the low earner should collect spousal benefits at age 66.

That being said, projections on how to maximize Social Security benefits depend on the ability of the trust fund to continue making payments. With no changes to the current system, trustees say they will have enough cash to pay full scheduled benefits through 2036, followed by three-quarters of scheduled benefits through 2085. Sarasota and Bradenton Florida residents should consider these factors when planning for their retirement. The next best fact about social security payments is that they are exempt from creditor claims.

View more information from Marc J. Soss at and

Marc Soss' practice focuses on estate and tax planning; probate and trust administration and litigation; guardianship law; and corporate law in Southwest Florida.  Marc is a frequent contributor to LISI and has published articles and been quoted in the Florida Bar, Rhode Island Bar, North Carolina Bar, Association of the United States Navy, Lawyers USA, Military.Com, Forbes.Com, and CNN Business. Marc also serves as an officer in the United States Naval Reserve.

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