Death and taxes may be the only two things that are certain in life. Although death is inevitable, preparing for it can be difficult. Making decisions too soon or too late can diminish or even eliminate some available planning options.

Timing uncertainty can make it difficult to determine how to maximize Social Security benefits, both for individuals and married couples. Most people know that the longer one waits to take Social Security, the larger the benefit will be. Even with this knowledge, roughly 80 percent of Americans claim Social Security payments before they reach the maximum payout at the age of 70, and approximately half of all eligible Americans start Social Security at age 62, when payments are first available but also the smallest. To avoid leaving money on the table – potentially a six-figure decision- it makes sense to consider multiple strategies.

Health and longevity are two very important factors when attempting to maximize benefits. If living into your 80s is a distinct possibility,[1]it is wise to consider delaying benefits in order to receive a larger monthly check (despite receiving the checks for fewer years). For married couples expecting at least one spouse to live past 80, it is likely advantageous for at least one spouse to wait until age 70 to commence Social Security payments. Under the current set of rules, this simple timing strategy allows the surviving spouse to continue to receive the larger of the two Social Security checks even if it was originally the deceased’s benefit.

Social Security benefits also have an annual cost of living increase. By delaying the start of your benefit, you increase the basis from which future upward adjustments will be calculated.

It is crucial to incorporate your own individual circumstances when thinking about any maximization strategy, as some situations could warrant taking Social Security early. SYM can review your specific situation and ascertain how Social Security best coordinates with your portfolio and long-term planning objectives.

[1]The average life expectancy at birth within the Organization for Economic Cooperation and Development’s 36 member countries, of which the United States is a constituent, is 80.1 years. The United States life expectancy was 78.7 years at the time of the study. Health at a Glance 2013: OECD Indicators, OECD Publishing, p. 25.