I do a lot of seminars on Social Security. If you’re reading this, it’s possible you even went to one. One of the biggest issues I hit on is the value of social security. There is a COLA (Cost of Living Adjustment) added onto your Social Security income every year. That is something an IRA simply cannot do. When you get an income from an IRA or a Pension, not only is all of the money taxable, but the income remains the same every year. If you’re getting $500 a month today, you will still only be getting $500 a month twenty years from now. With Social Security, if you’re receiving $2,000 a month today, you will be receiving close to $4,000 a month twenty years from now as a result of COLA. THAT is what makes Social Security so valuable. The other big advantage is the guaranteed 8% increase per year for every year you wait from Full Retirement Age (65-67) and age 70. Where else can you find a guaranteed 8% growth on your money today? Because I haven’t found it.
The bottom line is this, if you can avoid taking your Social Security early, then hold off as long as possible. You will end up with more money and a larger growth per year on your income. Also, Social Security isn’t fully taxable, so why would you want to receive less?