In order to delay Social Security, it requires a bridge of income while delaying, assuming that you have retired.
There are many options for building this bridge, but many feel that they are giving something up in the process of delaying their Social Security benefits. Primarily they may see it as a trade-off of having to deplete their investment assets during the years that they delay.
What if you didn’t have to deplete the principle of your investments while you delay Social Security? Could that strategy be the more palatable option as a way to grow a larger Social Security benefit?
As a case study, I recently worked with a couple who wanted to determine whether to start their Social Security now or delay it. Both are retired and don’t have work income to build the bridge. We worked out a strategy that allows them to delay until they are age 70 without having to draw their assets down.
By allocating a portion of their total portfolio to a type of investment that produces interest each year from the principal investment, they are able to create an income stream that does not deplete the investment. Because the interest rate on the investment is extremely generous, they only need to set aside a portion of their portfolio into this investment.
The investment they used? First Trust Deeds.
With an interest rate of approximately 8.5%, they can allocate a relatively small portion of their total investments in order to create this income bridge will they wait to take Social Security benefits at age 70.
Once their Social Security benefits are turned on at this maximum age, they can keep their investment in First Trust Deeds, reallocate to a different investment, or just turn the interest distribution off and choose to reinvest it to compound its growth.
If you have any questions about building a bridge to delay Social Security, please contact me.
