This study estimates the expected benefit from delayed Social Security claiming for higher-earning, healthier women who can expect to receive more future income payments than other Americans. The expected net present value of Social Security payments from delayed claiming for healthy women is $179,999, or more than twice the value of delayed claiming for a male of average health. The benefit from delayed claiming ranges from a low of $16,548 per year to $29,395 per year for healthy women. Even women of average health gain at least $132,202 in Social Security wealth by waiting until age 70 to claim Social Security income benefits. Significant gains to women who delay claiming are robust even considering a possible 2 percent increase in real discount rates and a 21 percent reduction in income that could occur if the Social Security trust fund depletes in 2026. The added benefits from reduced longevity and inflation risk suggest that the failure to delay claiming results in a significant loss in both retirement wealth and expected welfare.
Author: Sophia Duffy, JD, CPA, is the assistant professor of business taxation and serves as the assistant vice president of regulatory compliance at The American College of Financial Services. She received her law degree in 2012 from Temple University. Duffy specializes in small business taxation and estate planning.
Author: Michael Finke, PhD, CFP, is a professor and Frank M. Engle Distinguished Chair in economic security research at The American College of Financial Services, where he also directs the wealth management certified professional designation. He received a doctorate in consumer economics from the Ohio State University in 1998 and in finance from the University of Missouri in 2011. Finke was named one of the 25 most influential people in the field of investment advising in 2020 and 2021 by Investment Advisor Magazine.
Author: David Blanchett, PhD, CFA, CFP, is managing director and head of retirement research, DC Solutions for QMA, which is the quantitative equity and multi-asset solutions specialist of PGIM, the global investment management business of Prudential Financial, Inc. He is also an adjunct professor of wealth management at The American College of Financial Services. Blanchett holds a bachelor’s degree in finance and economics from the University of Kentucky, a master’s degree in financial services from The American College of Financial Services, a master’s degree in business administration from the University of Chicago Booth School of Business, and a doctorate in personal financial planning program from Texas Tech University.
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