The increase in Social Security benefits associated with deferring program benefits until the age of 70 can make a big difference in the lives of retirees and should be a serious consideration for every older person. This was reported by financial columnist Liz Weston in a new column published in the Los Angeles Times.
“8% of deferred retirement loans apply whether you are employed or not,” Weston writes to a reader asking about deferred benefits. “These loans will help you maximize the benefits you will receive for the rest of your life and possibly for the rest of your spouse’s life if you have a higher married income. This effect is so strong that many financial planners recommend that their clients use other resources, such as retirement funds, if it allows them to delay going to Social Security. ”
Sometimes these “other resources” can include equity capital, as before. detailed Weston in a previous article. Additionally, if the older person continued to work at an older age and received Social Security benefits while continuing to work, this may also be a tactic worth considering for some older people who fit into this situation.
“If you continued to work, your benefit could be slightly increased with additional earnings,” she writes. “This usually happens if you had a low income year included in the 35 highest income years that Social Security uses to calculate your benefit. If you earned more in 2020 than in one of these previous years, your 2020 income will replace last year’s profit in the formula and increase your bottom line. ”
In the end, however, it is the delay in receiving benefits that could be the biggest change in the lives of retirees, she writes.
“That said, an 8% deferred retirement loan is likely to have a much larger impact on what you end up getting, so don’t worry about any missed opportunities,” Weston writes. “Just try to postpone consideration of the application as long as possible.”
Weston specially quoted reverse mortgages in the past as an option for seniors looking for additional opportunities to generate cash flow among seniors.
“If you cannot cover the costs with your income, you may have other alternatives,” she wrote last fall. “If you own a home, have significant equity (at least 50%) and are at least 62 years old, a reverse mortgage can help you turn the value of your home into a guaranteed monthly check. Or you can sell your house and find cheaper housing. “
Read the new column on Social Security Benefits in the LA Times.