Skip to main content
PGIM LogoPGIM Logo
  • ABOUT
  • INSIGHTS
    • DC Plan Sponsor Survey
    • Financial Wellness
    • Retirement Income
    • Target Date Portfolios
  • SOLUTIONS
    • Careers at PGIM
    • Job Opportunities
""
White Paper

Delaying Social Security Retirement Benefits: the Bridge to Better Outcomes in Defined Contribution Plans?DelayingSocialSecurityRetirementBenefits:theBridgetoBetterOutcomesinDefinedContributionPlans?

Mar 16, 2023

5 mins

Share
  • Mail
  • LinkedIn
  • Twitter
  • Copy URL
Download PDF

Share

There are few strategies as widely touted among retirement academics as delayed claiming of Social Security benefits; however, the average Social Security claiming age today is only approximately 65. This means that many retirees are limiting their potential income in retirement.

The breakeven return required to outperform delayed claiming varies by household, but the annual nominal lifetime geometric return is likely to be somewhere around 9-10% for most DC participants who would actively consider delaying, which is a relatively high hurdle.

When focusing only on DC balances, less than 10% of participants are estimated to be able to delay claiming Social Security benefits to age 70 while maintaining a reasonable liquidity cushion. This is important for plan sponsors who are considering offering, or allocating to, longevity protected solutions, such as annuities, since participants are unlikely to have enough DC savings available to fund both (and delayed claiming of Social Security is currently more economically advantageous than purchasing an annuity, on average).

Download PDF
  • INSIGHTS

    • The Accidental Plan Sponsor Podcast
    • Whitepapers
  • DC THEMES

    • DC Plan Sponsor Survey
    • Financial Wellness
    • Retirement Income
    • Target Date Portfolios
  • SOLUTIONS

    • Target Date Portfolios
    • Advice Solutions
  • OTHER RESOURCES

    • Careers at PGIM
    • Contact Us
    • Diversity, Equity & Inclusion
    • Form CRS
    • Job Opportunities
    • Request for Information
PGIM Logo
  • Terms & Conditions
  • Privacy Policy
  • Accessibility Help
  • Cookie Preference Center

For Professional Investors only. All investments involve risk, including the possible loss of capital.

PGIM DC Solutions LLC (PGIM DC Solutions) is an SEC-registered investment adviser, a direct wholly-owned subsidiary of PGIM Quantitative Solutions LLC, and an indirect wholly-owned subsidiary of PGIM, Inc. (PGIM), the principal asset management business of Prudential Financial, Inc. (PFI) of the United States of America. Registration with the SEC does not imply a certain level of skill or training. PFI of the United States is not affiliated in any manner with Prudential plc incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom.

The content and materials presented here are for informational, illustrative and educational purposes only and should not be construed as investment advice or an offer or solicitation in respect of any products or services to any persons who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile or residence. The information presented is not a recommendation about managing or investing retirement savings and does not take into account individual investment objectives or financial situations.

PGIM, PGIM DC Solutions logo and the Rock design are service marks of PFI and its related entities, registered in many jurisdictions worldwide.

© 2023 PGIM DC Solutions. All Rights Reserved.

You are viewing this page in preview mode.

Edit Page