Optimizing the initiation of Social Security benefits

Authors

  • Joseph P. McCormack Department of Finance, University of Houston-Clear Lake
  • Grady Perdue Department of Finance, University of Houston-Clear Lake

DOI:

https://doi.org/10.61190/fsr.v15i4.4868

Keywords:

Retirement cash flow, Mortality, Social Security

Abstract

This research examines the decision couples and individuals face when determining the age at which to begin receiving their Social Security benefits. By comparing a personal required rate of return to the internal rate of return between various retirement ages and various life expectancies, a couple or an individual can better decide when to initiate receipt of Social Security benefits. Early initiation of benefits is the correct course of action for individuals with lower life expectancies. However, delayed initiation of benefits may often be the correct course of action for a single person with a long life expectancy or for a married male who is the higher income-earning spouse.

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Published

2006-12-31

Issue

Vol. 15 No. 4 (2006): FSR Winter 2006

Section

New Original Submission

License

Copyright (c) 2006 Academy of Financial Services

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Author(s) retain copyright and grant the Journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial 4.0 International License that allows to share the work with an acknowledgment of the work's authorship and initial publication in this Journal.

This license allows the author to remix, tweak, and build upon the original work non-commercially. The new work(s) must be non-commercial and acknowledge the original work.

How to Cite

Optimizing the initiation of Social Security benefits. (2006). Financial Services Review, 15(4), 335-348. https://doi.org/10.61190/fsr.v15i4.4868