Tuesday, July 1, 2008

Deferring Benefits To Get Delayed Retirement Credits at 70

On the PBS Nightly Business Report show on Memorial Day, they did a "Retirement Special", as markets were closed.
They briefly passed by on a retiree (believe close to 70) that decided to return what benefits he had received, to restart his SS LATER, at a higher amount..
We have your 8th Edition, don't believe I ran into what rules exist, like how long one has to do this, etc..
PS: My Mom, now 92 was a SS Claims Rep, and I was a Fellow of the Society of Actuaries in my younger days, and Enrolled Actuary, but have moved on into retirement investment management business.
My wife turned 62 May 31st, so that's why we have the book!

Roland from Illinois

A beneficiary can withdraw an application. All benefits, including those of dependents, must be returned. I discuss the process in Section 414 of the Social Security Benefits Handbook. I recently did any article about deferring benefits till age 70. The reason to do so, or to withdraw a previous application and return benefits, as in the example you provide, is to get the advantage of the Delayed Retirement Credits, which now come to 32%.

Look for the article which will be posted soon at Basil and Spice, a very helpful blog for improving your life. Click the My Article on Basil and Spice in the resources box at the top right.

I posed a question to financial types in that article. You seem to be a likely candidate based on your background and current position. Can one buy a lifetime annuity at age 70 for $98,000 (the benefits received from age 66 to age 70 at the approximate current maximum rate) that will pay more than $640 per month plus annual COLA increase? This would be the approximate gain from the maximum Delayed Retirement Credits for deferring benefits till age 72. So is it worth it?

P.S. God bless your mom! Maybe working for SSA had some long-term benefits.

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