Are you aware that when it comes to Social Security, timing can significantly impact the benefits you receive? Particularly if you’re on the wealthier side, knowing the best time to start receiving these payments can make a big difference.
Let’s consider this question: should individuals with a substantial financial cushion delay their Social Security benefits? The answer might surprise you.
It’s common to think that the wealthier you are, the less reliant you are on Social Security. That’s largely true. But there’s more to consider. Waiting a bit longer before tapping into your Social Security benefits can result in higher monthly payouts. The increase in payments can provide an additional layer of financial security and increase your overall wealth.
Many people can begin collecting Social Security benefits at age 62. However, each year you delay until the age of 70, your benefits grow by approximately 8%. This growth is above the inflation rate, meaning your purchasing power increases.
Waiting doesn’t mean you’re putting your wealth at risk. On the contrary, it can serve as an insurance policy against outliving your money, a situation known as “longevity risk.” The longer you live, the more value you get from your delayed Social Security benefits.
Of course, everyone’s situation is different. Factors like health, life expectancy, and personal financial needs play a major role in this decision. It’s crucial to work with a financial advisor to create a plan tailored to your circumstances.
A final note – Social Security benefits can be taxed depending on your income level, so it’s essential to take this into account when making your decision.
We understand these decisions can be complex. Here at Shah Total Planning, we specialize in helping people make informed decisions about their financial futures. We’re ready to provide you with the guidance you need when it comes to Social Security benefits and much more.
Remember, it’s never too early to start planning for your future. Reach out to us today to start the conversation. Our team is here to guide you through your financial journey and ensure that your wealth works for you.