Tuesday, July 23, 2013

Efficient Retirement Design--Combining Private Assets and Social Security to Maximize Retirement Resources

John B. Shoven and Sita N. Slavov
Stanford Institute for Economic Policy Research (SIEPR)
The authors conclude "with today's life expectancies and today's extremely low interest rates, it is almost to everyone's interest to delay the commencement of Social Security.  For many people, it is the value maximizing strategy."  The authors also discuss value-maximizing strategies for when to claim benefits for two-earner couples, and suggest that individuals consider delaying commencement of Social Security benefits either by spending other accumulated assets after retirement and before Social Security commencement, by continuing to work, or through a combination of the two.  An excellent read for anyone who has not yet commenced Social Security benefits (or who is still able to defer their Social Security benefit commencement date).

Readers are reminded that this website contains a simple spreadsheet that enables retirees to model using their accumulated savings to "bridge" the period between retirement and commencement of Social Security benefits while attempting to maintain constant total spendable income in real dollars.