Annuities and Social Security

Social Security Is an Annuity

Like any annuity, the longer one waits to begin collecting lifetime income payments from Social Security, the higher those payments will be. That is because those payments are based on the remaining life expectancy of a person of a given age.

With shorter life expectancies for older people, waiting to take Social Security until age 70 means those payments will be much bigger than if taken at age 62. But since many 70-year-olds may end up living 20 years or more, this decision to wait can make sense. It can also make sense for those with inadequate life insurance to help support their spouse after their death.


Who Can Benefit from Delaying Social Security?

Those who have significant financial resources and can afford to fund their retirement until age seventy, can also afford to delay starting benefits until age 70. If the person is single, or at least one member of a couple is single, being in excellent health and having a history of family longevity is a consideration. They will have a higher likelihood of enjoying those larger payments for longer and perhaps enjoy more total Social Security benefit income than if they had begun at age 62.


How Much Higher is SS at 70 than at 62?

The answer: it depends. Do you want to compare the difference in today’s 2022 dollars or inflated future dollars? Inflated future dollars are referred to as nominal dollars. Here is an example using the Social Security Administration’s online Quick Calculator:   Estimated Social Security Benefit (

Mrs. Retiree stops working in 2021, having made $200,000 in that final year of work. She turns 62 in June of 2022 and has a substantial investment portfolio. According to the Quick Calculator, if she starts benefits:

  • In June of 2022, at age 62, she will collect $2,269 a month.
  • In June of 2030, at age 70, she will collect $4,901 a month (in future 2030 dollars).

By waiting to receive benefits until age 70, her monthly benefit has increased by 115%, or about 10.1% compounded, per year, over eight years. Where else in the investment world can one be guaranteed an increase of 10.1% per year for eight years?


Create a Bridge Income from 62-70

There are several ways that someone with significant financial resources can create a bridge income to get them from 62 to age 70 by spending their resources. Examples:

  • Buy an 8-year period certain single premium immediate annuity that can produce the same amount of income that Social Security would have provided at age 62. These payments can be modified to increase annually, as they would be with Social Security’s cost of living adjustment.
  • Purchase a fixed indexed annuity with a guaranteed lifetime withdrawal benefit and discretionary withdrawal features that are well suited to help replicate the cash flow from Social Security from age 62 to age 70.


Call EMG today for more specifics on these strategies.


John Rafferty, Principal

For Annuity Support contact Donnie Clossman at


A rider is a provision of an annuity with additional costs, potential benefits, and features that should never be confused with the annuity itself. Before evaluating the benefits of a rider, carefully examine the annuity to which it is attached.

The rules governing RMDs are complex and subject to modification.

The information presented is abbreviated and is for general information purposes only.

Please note that if an individual misses taking an RMD, the penalties can be substantial. 

This material is not intended to provide investment, tax, or legal advice.