Your Money
The latest trustees' report shows Social Security’s combined trust funds are projected to run short in 2034—a year earlier than expected. Unsurprisingly, many Americans are claiming benefits as early as age 62, fearing the system won’t be there later. In 2023, about 25% of eligible recipients filed at the earliest possible age.
While early claiming can be the right move in cases of poor health or job loss, fear alone shouldn’t drive the decision. Let’s replace fear with strategy.
Delaying Social Security to age 70 is often discussed for its long-term benefits—but it’s more than just a retirement planning tip. Viewed through the lens of investing, delaying benefits can produce astonishing “returns.”
Yes, you may need to draw from your portfolio in the interim. But in exchange, you're effectively buying inflation-adjusted income backed by the U.S. government. For those who live into their 90s or beyond, the internal rate of return on delayed benefits can reach 4%–6% real (after inflation) return. That’s better than TIPS, better than commercial annuities, and rivals long-term equity returns—without market risk.
The key? Longevity. For those worried about outliving their money, delaying Social Security transforms an uncertain future into a predictable income stream.
Bottom line: If you’re in reasonably good health and have other resources to cover near-term expenses, delaying Social Security could be one of the most powerful, low-risk “investments” available—especially in a world of lower interest rates and volatile markets.
How Delaying Social Security Can Trump Long-Term Portfolio Returns Or Lifetime Annuity
by Michael Kitces
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