Originally Posted by Dawg52
Another slight twist to what others have suggested would be to buy a short term annuity for let's say 5 years for your income needs. Invest the rest in something safe like a cd. Then after 5 years, you will get much more from SS. You could then buy a lifetime annuity for the difference and get more bang for your buck as rates should be up by then. Just a thought anyway.
We actually did this in a manner due to our situation.
I retired at the age of 59 (no pension) and had a decision to make concerning my retirement income. I could draw from my portfolio (e.g. cash bucket) till age 62 or my FRA of 66 and claim SS.
However, my desire was two fold. That is to have a base income (much like a pension) to draw, supplemented by my portfolio withdrawls and also take advantage of any SS "step-up benefits" since SS is COLA adjusted (how much? That's another discussion).
Anyway, I did go long term when I purchased my SPIA. That means that it was purchased for a guaranteed period (joint life expectancy for me/DW) which meant that if we lived longer the payments would continue if either/both were still alive, but if we both passed before the guarantee period, the payments would continue to our estate.
We did not opt for the inflation adjusted product. We did not feel that we needed it, since the goal was to get from age 59 to age 70 and the expectation was that it would just be a supplement to our SS when we drew that income.
It also allowed me/DW to take advantage of other SS provisions rather than drawing at age 62 since we needed immediate funds. Those are the ability to place a spousal claim against my wife's SS at my FRA age of 66, along with delaying my SS for both the higher benefit, but more importantly to protect my DW in a financial sense, since the odds are that I will pass first (we're the same age). Also, with this plan my DW will be drawing SS at her FRA age of 66 rather than age 62.
So rather than delaying the purchase of an SPIA till a later date, we used it as "gap insurance" to cover part of our ER expenses, and allow us to use SS in a manner that is financially better - in our case.
Not to be done by everybody, but just to show how we actually did it (rather than just theory)...