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Asset Preservation Advisors


State: GA

APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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Retirement Planning: The Cost of Taking Social Security Benefits Too Early

The median income for those who delayed claiming Social Security benefits was 45 percent higher than for those who claimed early, GAO report finds.

| BY Donald Liebenson

One of the most important retirement planning strategies Americans can make is deciding when to retire and claim Social Security benefits. A new Government Accountability Office report finds that many eligible Americans are choosing to take their benefits at age 62, the earliest age of eligibility, despite higher monthly benefits for those who wait. This year, these early claimers will see their monthly benefits reduced by 25 percent compared to what they would have received if they had delayed claiming until reaching full retirement age (currently 66), the report states.

Social Security benefits cover 96 percent of American workers, as well as their spouses and survivors. The monthly benefits are calculated based on the beneficiary’s work and earnings history and the age at which they choose to begin receiving them. Financial literacy regarding Social Security becomes imperative for Americans who want to ensure that they claim the maximum amount of benefits to which they are entitled.

Who are most likely to claim their benefits early?  According to the report:

  • Those who work in physically-demanding blue collar jobs
  • Those in financial need stemming from unemployment or underemployment
  • Those with poor expectations of living to age 75

The GAO analysis finds that those who delay claiming until their full retirement age “tend to have greater income and wealth in retirement and rely less on Social Security than those who claim earlier. The median income for those who delay was 45 percent higher after claiming benefits than for those who claimed early, and 33 percent higher at age 72.”

In a 2013 Spectrem’s Millionaire Corner survey, the highest percentage of Affluent respondents (35 percent) indicated they will wait until their full retirement age to claim their Social Security benefits. One-third plan to wait longer to maximize their benefits, while 17 percent said they would take their benefits as early as possible. This latter option was most attractive to those who were already retired (28 percent), those with a net worth between $100,000 and $500,000 (25 percent), or who had a household income of under $100,000.

Where do these affluent investors go for information about Social Security? More than half (54 percent) consulted the Social Security Administration website, while 16 percent followed up with the SSA’s printed materials.

Related story: Social Security income—what do you need to know?



About the Author

Donald Liebenson


Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.  

A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.