Should You Buy an Annuity from Social Security?
The brief’s key findings are:
- Households now retiring need to transform their 401(k) and IRA savings into retirement income.
- One way is to delay claiming Social Security to increase their monthly benefit, using savings to pay current expenses while they wait.
- In effect, they are buying an annuity from Social Security: The savings used is the “price” and the increase in their monthly benefit the annuity income it “buys.”
- Buying an annuity from Social Security is generally the best deal in town, especially in today’s low interest-rate environment.