The Annuity Everyone Needs — and Anybody Can Get

Smiling senior woman holding money
Photo by Volodymyr Baleha / Shutterstock.com

Finding and purchasing the right annuity — especially one with built-in inflation protection — can be a difficult and expensive chore.

But if you are smart and flexible, virtually any American retiree can grab such an annuity on the cheap.

By waiting until age 70 to claim Social Security, you can create an annuity that will pay out the maximum monthly income for which you are eligible.

Even better, the federal government will adjust the payment upward each year to account for inflation — all at no extra cost to you. That is a virtually unheard-of benefit in the world of annuities, where inflation adjustments typically are available only as an expensive add-on feature.

All of this means delaying Social Security benefits can be a great way to add a little extra financial peace of mind to your golden years.

As Social Security expert Jeff Miller — co-founder of Social Security Choices, a company that provides advice on Social Security claiming decisions — wrote in a recent Q&A for Money Talks News:

“Social Security is an annuity, and delayed claiming is by far the cheapest annuity you can buy.”

How to get this benefit

To some degree, anyone who collects Social Security gets this built-in annuity benefit. Even if you claim early — such as when you are first eligible at age 62, or any time thereafter up to age 70 — you will get a guaranteed inflation-adjusted payment each month, year after year.

But delaying Social Security until age 70 is the best way to get the biggest payoff if you want to use your benefits in place of a traditional annuity.

By waiting, you get a larger check for the rest of your lifetime. As the Social Security Administration explains, for each year you delay claiming Social Security beyond what’s known as your “full retirement age,” your benefit increases by up to 8%.

Now, there can be good reasons not to delay your Social Security benefits. We outline a few of them in “5 Reasons You Should Claim Social Security ASAP.”

So, you need to determine which claiming strategy makes the best sense for you — and a company like Social Security Choices can help with that decision, as we detail in “A Simple Way to Maximize Your Social Security.”

But if you have saved a lot of money for retirement and want extra peace of mind, delaying Social Security can be a great way to create the maximum inflation-protected income for which you are eligible. And you get that protection without having to pay another dime beyond what you contributed in FICA taxes during your working years.

Sound like a strategy that might work for you? The key to making it a reality is to work later into life and keep a steady income until age 70 — or to have a nest egg big enough to see you through the early years of retirement until you begin claiming Social Security later.

You can get help with saving for retirement by reading:

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
14 Things That Are ‘Free’ With Medicare
14 Things That Are ‘Free’ With Medicare

These services could save you money and help prevent costly health problems.

15 Ways Retirees Can Make Their Savings Last Longer
15 Ways Retirees Can Make Their Savings Last Longer

Study these strategies to make your golden years gleam.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

7 Things That Prove Cheaper Isn’t Always Better
7 Things That Prove Cheaper Isn’t Always Better

These purchases can end up costing you more if you try to go the cheap route.

15 Purchases That Make Life Easier As You Age
15 Purchases That Make Life Easier As You Age

There are many products that can make getting older — or any time of life — a little easier.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

8 Tips for Retiring Comfortably on Social Security Alone
8 Tips for Retiring Comfortably on Social Security Alone

It’s never too early to start learning how to live well while living on less.

Am I Eligible for My Mother’s Social Security Benefit?
Am I Eligible for My Mother’s Social Security Benefit?

Can an adult daughter tap into her late mother’s benefit?

11 Generic Products You Should Buy at Costco
11 Generic Products You Should Buy at Costco

Not all generics are worthwhile, but these are among the best from Costco’s Kirkland Signature brand.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

This Gas Station Scam Is Victimizing More Drivers
This Gas Station Scam Is Victimizing More Drivers

For the second straight year, a growing number of Americans believe they’ve fallen prey to this scam.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

15 Free Streaming Services to Watch While Stuck at Home
15 Free Streaming Services to Watch While Stuck at Home

These free movie streaming sites offer thousands of movies and TV shows, including recent releases and beloved classics. If you love free movies, online sites are where you need to look for the best list of features that are just one easy click away.

6 Legal Documents Retirees Need — but Don’t Have
6 Legal Documents Retirees Need — but Don’t Have

Few retirees have all of these documents that are crucial to their golden years — especially during a pandemic.

Can a Divorced Widow Claim Her First Husband’s Social Security Benefits?
Can a Divorced Widow Claim Her First Husband’s Social Security Benefits?

The rules are complicated when it comes to eligibility for survivors benefits.

27 Things You Should Never Pay For — and How to Get Them for Free
27 Things You Should Never Pay For — and How to Get Them for Free

When you know the tricks, you can save big on all kinds of useful things that others pay for.

15 Amazon Purchases That We Are Loving Right Now
15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

10 Things I Always Buy at Trader Joe’s
10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

11 Huge Retirement Costs That Are Often Overlooked
11 Huge Retirement Costs That Are Often Overlooked

Does your retirement budget account for all of these costs?

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.