S<\/span>ocial Security is the backbone of most Americans’ retirement finances. In fact, for half of Americans, it’s their principal old age asset. And for another 20 percent it’s their second most important asset. It’s passing strange then, that so few people think twice when it comes to taking their Social Security benefits. Many, perhaps most, rush over to their local Social Security office the minute they retire and say, “Give me my benefits.” Only 2 percent wait until 70 to collect their retirement benefits, even though they will start at a 76 percent higher inflation-adjusted value than if they take them at the earliest possible age\u201462.<\/p>\n The good folks at Social Security are likely to encourage you to take your benefits as soon as possible. They’ll say yes, your benefits will be higher if you wait but that things have been set up to provide you the same lifetime benefits on average, no matter when you take them. They’ll also likely suggest that taking them early is the safest bet, because otherwise, you might die before you collect them.<\/p>\n This is (expletive deleted) backwards. You can’t play the averages when it comes to insuring your house, your car, your health or your life. You can’t play the averages, because you have only one house that will or won’t burn down, one (maybe two) cars to total or not total, one body that will or will not need 10 hyper-expensive operations and one life that will or will not end at the last possible moment, e.g., age 110.<\/p>\n Fortunately or unfortunately, we can’t count on dying on time. But to prevent jinxing ourselves, we fixate on dying young and worry about losing out on our benefits when that happens. But dying young is not a financial problem. When we die we go to heaven (most of us, anyway) and heaven is well, heaven. You don’t need any money in heaven. No, life’s real financing risk is not dying. Instead, it’s living as long as possible and running out of money.<\/p>\n Social Security offers incredibly inexpensive and reliable insurance against the catastrophic longevity outcome\u2014living to 100 or beyond.<\/p>\n Changing people’s mindsets about longevity risk and the enormous economic benefits from patience in taking Social Security is at the core of Get What\u2019s Yours\u2014Revised and Updated: The Secrets to Maxing Out Your Social Security<\/em><\/a>, which I co-authored with Money.com<\/a> personal finance columnist, Phil Moeller, and PBS NewHour economics correspondent, Paul Solman.<\/p>\n This is the second edition of the book. The first was released in February a year ago and became a number one NY Times Best Seller. We didn’t expect to write an update so quickly, but Social Security rules changed dramatically last November. There are important grandfathering provisions to the new rules, which will remain unchanged in part for the next 8 years for married and divorced workers who were 62 before January 2nd of this year.<\/p>\n But whether or not you were grand-parented, the vast majority of the gains from maximizing your Social Security benefits come from patience\u2014waiting to take much higher benefits. Admittedly, this decision to wait entails paying a price for the eventually higher income stream. The price is the loss of smaller benefits while you wait to take higher ones.<\/p>\n That’s the price you pay for buying the larger income stream. So waiting to collect entails in effect, buying an annuity from Social Security. But it’s one that comes at a terrifically low price for two reasons. First, the determination of how much to reward patience was made years ago when people died much younger on average. Thus, the benefit hikes from patience are based on highly outdated actuarial tables. Second, when the rewards to patience were set, real (inflation-adjusted) interest rates were much higher than they are now. So not only do you receive an actuarial advantage, but you also earn a fantastic rate of return for practicing patience.<\/p>\n To be clear, as our book points out, not everyone should wait to collect benefits.<\/p>\n Widows and widowers need to decide whether to collect their survivor’s benefit as early as possible and their retirement benefit as late as possible or take their retirement benefit starting at 62 and their survivor’s benefit upon reaching full retirement (or earlier if their deceased spouse took their own retirement benefit early). The same applies to divorced widows or widowers who were married for 10 or more years and to spouses who remarried after age 60 and whose ex of a decade or longer has died.<\/p>\n Spouses who want to provide their partners and young or disabled children with spousal or child benefits on their work record may also be able to increase their family’s collective lifetime benefits by taking their own retirement benefits early and thereby, activating benefits for their spouse or children.<\/p>\n Disabled workers have an entirely different set of Social Security rules to master and need to decide not whether to wait to start taking their retirement benefit, but rather whether or not to put it in suspension, starting at full retirement age, so that they can restart it at say, 70 at a much higher lever.<\/p>\n In short, Social Security remains crazy complex. Indeed, with its 2,728 basic rules and hundreds of thousands of rules about those rules, some of them brand new, Social Security may be the most complex fiscal institution yet devised.<\/p>\n You don’t need to become an expert in all its nuances. But you do need to learn enough not to be taken. Our book is a tremendous help in this regard and costs a pittance compared to what it will likely be worth to you.<\/p>\n It’s most important function however, may be to keep you from listening to what the folks at Social Security say you can or can’t do. In my experience, Social Security’s 40,000 staff members are often inadequately trained and sometimes arrogant. You can easily have eight people in a row tell with perfect assurance that you can’t do something, like suspend your retirement benefit, that you absolutely can do.<\/p>\n So if you learn anything from our book, in addition to the basic mantra that patience pays, it’s not to trust Social Security. You need to tell, not ask, Social Security what to do.<\/p>\n What you need to know about social security NOW<\/p>\n","protected":false},"author":3,"featured_media":240,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[57,56],"tags":[],"class_list":["post-3742","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-spring-2016-columns","category-spring-2016"],"acf":[],"_links":{"self":[{"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/posts\/3742","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/comments?post=3742"}],"version-history":[{"count":12,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/posts\/3742\/revisions"}],"predecessor-version":[{"id":4190,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/posts\/3742\/revisions\/4190"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/media\/240"}],"wp:attachment":[{"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/media?parent=3742"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/categories?post=3742"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/tags?post=3742"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Laurence J. Kotlikoff, Philip Moeller and Paul Solman are the authors of<\/em> GET WHAT\u2019S YOURS \u2013 Revised and Updated: The Secrets to Maxing Out Your Social Security<\/a>, \u00a9 2016 published by Simon & Schuster<\/em><\/h5>\n","protected":false},"excerpt":{"rendered":"