Social Security: the Best “Annuity”

Social Security isn’t technically an annuity — it’s best viewed as a form of income insurance that protects the disabled and orphans, as well as retirees. But it works much like an annuity, in that it guarantees a lifetime monthly income stream for seniors. Financial advisers sometimes describe Social Security as the best annuity of all, because it’s inflation protected, and because its benefits pass along to a surviving spouse. That is, when one partner dies, the survivor receives either his or her own Social Security benefit, or the benefit of the deceased —  whichever is higher.

A key feature of Social Security is that its monthly payout increases substantially the longer a potential recipient defers claiming benefits, up to age 70. The Washington Post recently reported that benefits claimed at age 70 are at least 76 per cent higher than they would have been if claimed at age 62.  That’s why many are delaying retirement or living on other assets after retiring until they hit 70.Social Security Works

Social Security is such a good deal, it’s a wonder any politician would dare propose tampering with it. Yet Social Security is constantly under attack from those who claim the system is in trouble and that benefits must be reduced. This fear- mongering is amply refuted in an excellent new book, Social Security Works! Why Social Security Isn’t Going Broke and How Expanding It Will Help Us All, by Nancy Altman and Eric Kingson.

Seniors should be on the alert for politicians who want to undermine their financial security by weakening Social Security. The National Committee to Preserve Social Security and Medicare keeps track of them and offers strategies for countering their schemes.  Social Security Works, the website associated with Altman and Kingson’s book, is another excellent resource,


1 thought on “Social Security: the Best “Annuity”

  1. Pingback: Senior Common Sense on Social Security | Common Sense for Seniors

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