Investing in the market"If an individual starts collecting at age [62] and puts the benefits in a S&P index fund for 8 years that individual would be way ahead of postponing collection until the age of 70," another CNBC reader wrote.
With the S&P 500 index up about 26% in the past year, it is tempting to think just investing in a fund that tracks that index can bring in more money than delaying Social Security.
An individual who waits until age 70 to claim Social Security benefits will receive a benefit of about 77% higher than what they would receive at age 62, according to Blanchett's research. For every year retirees delay from full retirement age, they may get an 8% benefit boost.
To best gauge the trade-off, experts say it's most accurate to compare delaying Social Security to investing in bonds rather than equities. The advantage of Social Security benefits is that they are adjusted for inflation and pay income for the rest of a beneficiary's life.
"If I were going to compare Social Security, I should be comparing to bond yields," said Joe Elsasser, a certified financial planner and founder and president of Covisum, a Social Security claiming software company.
"If I were comparing to bond yields, then delaying Social Security all of a sudden appears much more reasonable," he said.
https://www.msn.com/en-us/money/retirement/it-s-already-highway-robbery-why-people-don-t-wait-to-claim-social-security-and-what-experts-say/ar-BB1ndjFO?ocid=entnewsntp&pc=U531&cvid=fe227ef097c347e7a436d5214fda65a3&ei=30Break-even age"The person who withdraws at 62 will have the same amount of [money] as the person who withdraws at 72 by the time they both reach 78, their expected date of death," another CNBC reader wrote. "You only make out if [you] beat the odds and live longer." The reader referenced "72," but the highest age to wait for bigger benefits is age 70.
Many Social Security claimants tend to focus on a "break-even age" — the point at which they personally would make out the same if they delay or claim early.
To benefit from delayed claiming, they would have to live past their estimated break-even age.
Yet experts say it's best to base a claiming decision on an individual's entire financial situation rather than one metric.
Break-even age can be a valuable reference point, Elsasser said.
But claimants also need to consider their own longevity, he said, which may be better than their parents' due to improved health care and financial resources.
When couples are making a claiming decision, a higher wage earner needs to consider the longevity of both individuals, which often also supports delayed claiming, according to Elsasser.
