DALLAS, April 27, 2015 /PRNewswire/ -- If you are over 70 year of age, odds are your Social Security check is not as large as it could have been. But if you are younger than 70, there is still time to do what most Americans don't do: get the maximum benefit the law allows.
Help is on the way. In a new book, Get What's Yours: The Secrets to Maxing Out Your Social Security, Goodman Institute Senior Fellow Laurence Kotlikoff and co-authors Philip Moeller and Paul Solman identify just about every mistake you are likely to make and tell you how to avoid them.
- The vast majority of people would be better off if they delay claiming their retirement benefit until age 70; yet less than 2 percent of retirees do that.
- A benefit claimed at age 70 will be 76 percent greater than a benefit claimed at age 62.
- Between 66 and 70 the retirement benefit grows by 8 percent in real terms for each year of delay.
Of the 8 percent increase, about 5 percent is an adjustment for mortality (the older you are, the fewer remaining years of life). But the other 3 percent is an inflation adjusted real rate of return. "Where else these days can you get a risk-free, real rate of return of 3 percent?" Goodman asks.
Here is something couples need to know. Suppose you and your spouse are age 66. In most cases, the optimal decision here is for one of you to file for retirement, but then suspend its collection (so that the benefit grows by 8 percent per year for the next four years). Then the other spouse can file for spousal benefits for the next four years and choose to draw a spousal benefit or a retirement benefit in their own right thereafter.
Here is a bad news gotcha: If you are entitled to two benefits (say spousal and retirement) you can only have one of them at any one time. If you are not careful, you may lose thousands of dollars.
One study estimates that Americans are losing $10.6 billion a year by failing to make the right choices on decisions like this.
SOURCE Goodman Institute