TY - JOUR T1 - Practical Applications of A Social Security “Annuity Purchase”: <em>Is Delaying Social Security More Effective than Purchasing a Deferred Income Annuity?</em> JF - Practical Applications SP - 1 LP - 5 DO - 10.3905/pa.6.3.298 VL - 6 IS - 3 AU - Jonathan Rundle Y1 - 2019/01/31 UR - https://pm-research.com/content/6/3/1.4.abstract N2 - In A Social Security “Annuity Purchase”: Is Delaying Social Security More Effective than Purchasing a Deferred Income Annuity?, from the Summer 2018 issue of The Journal of Retirement, Jonathan Rundle of the University of Mount Olive compares two retirement strategies involving savings and commencement dates for Social Security retirement benefits. Is it more advantageous for a retiree to consume savings while delaying commencement of Social Security benefits until age 70 to realize higher monthly Social Security benefits? Or is it better to commence Social Security benefits at age 66 and make up the reduction in benefit cash flow by using savings to purchase a deferred annuity starting at age 70? Based on extensive analysis, including tax considerations for both single and married retirees, and Monte Carlo simulations, Rundle concludes that using savings to delay the start of Social Security retirement benefits until age 70 is generally a better strategy than starting benefits at age 66 and purchasing a deferred annuity. The advantage applies for both single and married retirees and is greater in the married context.TOPICS: Retirement, social security, simulations ER -