You need to reread that article you just handed me.
Delaying Social Security As The Best Long-Term Return Money CanBuy
Social Security, and the decision to delay benefits represents a unique form of “investment” –a return that is contingent not upon interest rates or market performance, but survival and longevity. Of course, it’s worth noting that because the value of the Social Security delay decision is contingent on how long someone lives, it is clearly not beneficial for those who are in poor health or are otherwise not optimistic about living a long time (though be certain to look at joint health and longevity in the case of couples planning for survivor benefits, not to mention other couples-specific strategies like File-and-Suspend that may further impact timing decisions).
Nonetheless, the decision to delay Social Security can be evaluated based on the implicit rate of return it creates by choosing to delay, and over longer time horizons – when clients may “need the money most” as they have more years of retirement expenses to cover in the first place – the return of the Social Security delay becomes quite compelling. In fact, the return is generally far superior to any risk-adjusted returns that can be achieved over comparable time periods by the available alternatives, whether investing in risk-free bonds, growth equities, or buying a commercially available annuity. And because the system is indexed to inflation, its real returns will be maintained even if inflation rises and will only become better if longevity continues to increase as well. In fact, ultimately the decision to delay Social Security delivers the best results when there is either unexpected inflation, unusually long longevity, or especially bad market returns, which are the exact three scenarios that traditional portfolios are the least effective at managing, making the decision to delay Social Security the ultimate form of “anti-fragile” triple hedge!
