by John Darer® CLU ChFC MSSC CeFT® RSP CLTC
There is a compelling reason to structure a settlement that some attorneys, plaintiffs and insurance adjusters may have overlooked.
How a Structured Settlement Can Be Used to Help Maximize Social Security Retirement income
A structured settlement can be used to replace the payments that a plaintiff would receive from social security and give them the economic support to delay social security until age 70 when benefits are considerably higher. Plaintiffs thinking of taking social security early, beginning at age 62 may want to think again when looking at these numbers compiled from the Social Security Administration website.
Percentage Social Security is reduced if you take early retirement at age 62, instead of at full retirement
- Born 1960 or later 30%
- Born 1955-1959 25.83%-29.17%
Percentage Social Security is increased for delaying receipt from full retirement age until age 70
- Born 1960 or later 32% [ Note full retirement age is age 67 for those born 1960 or later]
The last time I checked for myself, there was an almost $9,000 annual difference in payments for life if I defer from full retirement at age 67 until age 70.
- For married couples, if the settlement is large enough, a structured settlement could be fashioned so that both spouses could afford to delay receiving social security.
- Plaintiff lawyers can use this strategy with structured attorney fees or attorney fee deferred compensation, even though payments are taxable.
Each person's decision should be taken after consideration of that person's unique set of facts.