Considerations To Keep In Mind While Deciding To Defer Social Security

Retirees are faced with the choice to start taking distributions from Social Security or delay and take advantage of the yearly growth in benefits that deferment creates. However, there are many considerations that need to be taken into account when making the decision including the following:

• The state of a retirees health is of primary importance. Poor health makes taking the earlier distribution a better option since it provides extra income to pay medical bills and ensures that some benefits are gained before death.
• Since the increase to Social Security is %8 per year, it makes sense to take the earlier distribution if the retiree is able to beat that number through investment. However, this is a strategy that should be taken carefully as Social Security is offering a guarantee while the market can easily take away any gain made with the early distribution.
• If the retiree intends to be active in early retirement it will make sense to take the early distribution to over cost of the busy lifestyle and essentially enjoy the money while they can.

See Donna Fuscaldo, 4 Reasons You May Not Want To Delay Social Security Payments, Investopedia, November 17, 2015.

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