Two Key Principles to Know About Social Security and Retirement

Forbes magazine analyzed: Six Things Every American Should Know About Social Security And Retirement.

Two stood out to me:

  1. Social Security’s average 40% benefit is just that, an average i.e “the more you earn, the lower the percent that Social Security benefit checks cover.
  2. Your benefit level if you wait until age 70 to start, is 75% greater than if you begin at age 62 i.e. “retirees should consider spending down at least a part of their savings, to delay the age at which they claim Social Security, rather than trying to spend their savings evenly throughout their retirement.”

Point two was detailed elsewhere which I encourage you to read:

Typically that’s meant to be accomplished by means of continuing to work, but the good folks at Pew propose something different, to the extent that state-managed auto-enrollment IRAs result in more people having modest amounts of retirement savings.  These retirees, they suggest, shouldn’t try to spread their savings out over the course of their retirement years to supplement their Social Security check, but instead spend down their savings right away in order to defer collecting Social Security and boost their benefits.