Post #490 by intercst on the Retirement Investing board

Personal Finance Topics / Retirement Investing

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<<The SSA is an insurance company. They have a pretty good idea of what the average age at death is and have set up the payments so that somewhere around age 80 is breakeven. >>

That's correct. The SSA has an excellent idea of the average longevity of SS beneficiaries, sick and healthy. But SSA makes no adjustment in the rate if one of the healthy ones decides to "buy" a larger annuity by waiting until age 70

Commercial insurance companies factor in "adverse selection" into the premiums they charge for life annuities. SSA does not. That's one of the reasons waiting until age 70 effectively allows you to "buy" a life annuity at a big discount to what a commercial insurer would charge for the same increase in monthly benefits.

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