I routinely talk to people who filed for Social Security benefits at 62, the earliest possible age. They either didn’t understand the value of delaying filing or felt they had no choice because they needed the money. Financial planners are in a good position to help clients understand the importance of delaying.

Consider a single man who is eligible to collect $1,500 per month in SS benefits at age 62.  If he waits until age 70, his monthly benefits will be at least $2,640, an increase of 76%. Moreover, starting in 1975 automatic cost-of-living adjustments were applied to SS benefits. While these “COLAs” have been small since the onset of the recent recession, they have still averaged almost 2.8% annually since 2000. Including COLAs into the calculation further illustrates the importance in delaying filing. If the single man mentioned above waits until 70, he would receive a whopping 119% increase in monthly benefits to $3,395 per month!

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