Social Security As Easy As 1 2 3…

Larry Kotlikoff is developing software to solve the Social Security problem. As a result, he is very familiar with Social Security and has come up with three rules to maximize Social Security benefits.

1.  Wait to collect, you will get much higher benefits over fewer years.
2.  Take any other benefits available to you based on your spouse’s earnings history.
3.  Make sure that following the first rule does not conflict with following the second rule and vice  versa.     

Social Security decreases in benefits if taken prematurely and increases in benefits if taken late. Typically, retirement benefits starting at age 70 are more common than age 62. Spousal and survivor benefits are much higher if taken at age 66, the “full retirement age.” According to Kotlikoff, benefits can be about 40 percent higher when taken at the full retirement age. While many people fear that they may die without collecting benefits, the real problem is outliving your life expectancy. If you believe you will outlive your life expectancy waiting to collect is likely the best choice. However, even if you do not believe you will outlive your life expectancy waiting to collect may allow your spouse to collect more survivor benefits.  It’s a good idea to figure out if you are available to receive benefits to figure out which benefits to take and when to take them. Kotlikoff states “The key to double dipping is to take the two benefits at different times and not lose anything, because the benefit you take last will have risen while you waited.”

See Larry Kotlikoff, Three Rules For How To Get The Highest Social Security Benefits, PBS NewsHour, Mar. 13, 2013.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this to my attention.