Use This Simple Arbitrage Strategy to Maximize Your Retirement Income

Are you throwing away easy money by not understanding how Social Security works?

In this video we’re going to dive DEEP into an arbitrage strategy you can incorporate to provide you significant bump in your retirement income when it comes to choose when to claim Social Security.

We’ll revisit the professors from Stanford and George Mason who had written an article titled “LEAVING BIG MONEY ON THE TABLE:

The authors show us how an annuity from a private company costs SIGNFICANTLY more than the one you can get from Social Security. In fact, using this arbitrage strategy could increase your net worth by nearly $250.000 depending on your circumstances.

The best thing about this strategy is ANYONE can do it and in almost ALL cases you will net gains. What other strategy can you look at that the benefits are so in your favor?

For example, John is 66 and single. He needs $13,500 in annual income. If he takes Social Security at 66 his benefit will be $12,500. So he will need to supplement his income with $1,000 each year from some other source.

Have read the OVERWHELMING academic literature on income annuities, he decides to purchase an inflation-indexed income annuity that will provide $1,000 a year in income.

That annuity costs $22,290. So he spends $22,290 to have $13,500 a year in inflation-adjusted income.

Jerry, on the other hand, says he’s going to delay taking Social Security until he’s 67, when his Social Security income is $13,500. Because his Social Securityh income will provide his income needs next year and every year there after, he only needs to come up with enough money to get him through this year, which is $13,500.

So, Jerry spends $13,500 to have $13,500 in inflation adjusted income each year for the rest of his life.

John, though, spent $22,290 which is $8,790 more, for the same net result!

And it only gets better for married couples. If John were married and wanted that $1,000 annual income to be there, in full, for his surviving spouse, he’d have to pay $28,547 for that annuity.

He’d spent $28,547 for $13,500 of inflation-indexed to cover his and his surviving spouse’s life, whereas he’d only needed to have spent $13,500 in the one year in which he would delay Social Security.

In this scenario the arbitrage opportunity is over $15,000, which more than DOUBLE the costs of deferring Social Security for a year.

The longer you play this scenario out, the beneficial it becomes in almost EVERY CASE too.

So, are you leaving easy money on the table by taking Social Security early???


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