A recent study ( The Retirement Solution Hiding in Plain Sight) estimates that only 4% of retirees make the correct decision about when to start receiving Social Security. This highlights a horrendously costly mistake by 96% of the population. Regardless of anything else, your financial future might well revolve around this one important choice.
Guaranteed Returns
Full Social Security retirement age for those with retirement on the horizon generally falls somewhere between ages 66 and 67 depending on your exact birthdate. Early Social Security payments with substantially reduced benefits can be claimed as early as age 62. If left unclaimed, however, Social Security benefits continue to increase until age 70. Between the early benefits age (62) and the maximum Social Security benefit age (70), monthly benefits increase by about 8% per year. You want a “guaranteed” 8% return? Delay taking Social Security until age 70.An amazing 79% of retirees elect to receive Social Security early between ages 62-64. The study referenced earlier estimates this age is only optimal for about 8% of the population. The average cost of this poor decision is estimated to be $111,000 per household! The chart below details the optimal versus actual start date by age.