Smart Money: Delaying social security can pay in long run


DEAR BRUCE >> My husband is going to retire when he is 64 or 65 years old. When should he take his Social Security? I was thinking immediately, but others say he should wait until he is 70.

— S.M.

DEAR S.M. >> If you need the money now, then you should take the Social Security at age 65. If you can get along without it, then every year you stretch it out, you increase the amount of money that you'll receive once you start to collect. After a few years, you'll be ahead of the game. The question is, do you need the money now? Please ask yourself this first before making any decisions.

DEAR BRUCE >> I am an 86-year-old, retired federal employee drawing $5,300 a month. My spouse and I are completely debt-free, with a home worth about $150,000 and $100,000 in a money market account, which is earning less than 1 percent.

At this stage in my life, I am not interested in getting involved with the stock market, and we don't have extended life care insurance. Is there someplace I could put the $100,000 to earn more?

— C.F.

DEAR C.F. >> The 1 percent you are earning on your money is criminal! Until such time as the Federal Reserve raises interest rates, that's about what you are going to be able to earn unless you are willing to take some risk.

Get ahold of a good, solid broker and explain your circumstances. I am confident that he or she can find you an investment that will pay you close to 5 percent, including dividends and projected increase in stock price. You're not going to get that price every year (some years you may get less), but 1 percent or less is terrible. The degree of risk I am suggesting is not all that great.

DEAR BRUCE >> What do you think about the extra protection coverage that the credit card companies try to sell you when you open a credit card? They say they will pay the minimum payment if you lose your job, etc.

— Reader

DEAR READER >> If your job situation is at risk, then such an arrangement may be of value to you. If you lose your job, the card company will make the payments for a certain period of time.

That aside, it seems to me that this is another expense for you and a profit for the credit card company. In my opinion, there is no reason to spring for that kind of coverage.

Send questions to Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.


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