An Index Overview Part IV: Index Investing – Opportunities and Obstacles
Written by Andrew Hunt
Written by Jason Hiley
Recently I read a story in the Omaha World Herald about a woman in central Nebraska that passed away on her 110th birthday. Upon reading this, I began thinking about the lifetime Social Security benefits someone would collect if they lived 110 years. Her husband passed away in 1975, so she spent the last 38 years as a widow likely receiving a Social Security survivor income benefit. The implications of her husband’s decision on when to take Social Security would have been profound.
Utilizing today’s rules, let’s examine how the age at which her husband elected to receive Social Security would have impacted her cumulative lifetime Social Security benefits as a widow. First some facts and assumptions:
Let’s look at the impact the timing of when her husband elected Social Security would have had on her lifetime survivor income benefits.
|SurvivingSpouse’s Age||Cumulative Lifetime Benefit*(spouse elected @ 62)||Cumulative Lifetime Benefit*(spouse elected @ 70)||Difference|
*Assumes the annual benefit is increased by 2.8% annually due to Cost of Living Adjustments
The difference between electing at 62 and 70 would be more than $900,000 dollars!
Although this example may be a bit extreme, it’s obvious there can be a tremendous advantage to delaying the receipt of Social Security. For many retirees, outliving their money is a primary concern, and living well beyond life expectancy can turn concern into reality. Delaying Social Security can be a great way to hedge against that risk.
Consult a Professional
Unfortunately, most people make Social Security decisions without consulting a professional. You may be surprised to learn that the Social Security office is not allowed to give advice on strategies that would help maximize your potential benefit. An expert in Social Security planning can take into account variables such as your current age, life expectancy, and financial assets in order to help you identify an election planning strategy best suited to maximize your lifetime Social Security benefit.
Don’t miss out on tens if not hundreds of thousands of dollars in lifetime Social Security benefits by making an uninformed decision. Call or email us today to arrange a time to discuss your unique situation.
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