Delaying Annuity Payments Can Raise Payouts 9%

By working five years beyond the age of eligibility, the lowest income earners can boost their annuity payout by 98%. This compares with increases ranging from 42% to 71% for those in higher “lifetime earnings quintiles.”

Similarly, the report notes, delaying retirement can have a positive impact on Social Security income. Citing a hypothetical couple–both age 60, and assuming that one spouse earns $100,000 annually and the other $50,000 annually–the report shows that if both spouses retire at age 62, the cumulative Social Security earnings will top out at $1.65 million at age 80.

If the lower wage earner retires at age 62 and the higher wage earner retires at age 70, the couple’s cumulative earnings will reach $2.373 million. If both delay to age 70 to take income, the couple’s cumulative payments total $2.425 million.

The study also highlights the importance of planning for the risk of “shocks,” noting that 67 percent of men and 70 percent of women will experience one or more shocks in a nine-year period. These include medical conditions (67 percent of married couples 50 percent of singles, respectively), over age 70; severe disability (29 percent and 29 percent); cognitive impairment (19 percent and 17 percent); and entering a nursing home (23 percent and 22 percent).