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How to make a million after age 70

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How to make a million: Delay Social Security
How to make a million: Delay Social Security © Fotokostic/Shutterstock.com

How to make a million: Delay Social Security

In the world of retirement savings, Social Security is like a loyal dog. Everything else may fail you, but good old Rover remains by your side.

The way you tap Social Security payments can enhance your odds of becoming rich, says Barry Korb, president of Lighthouse Financial Planning in Potomac, Md.

"Many middle-class couples could accumulate $1 million if they delayed claiming their Social Security until age 70, and then saved and appropriately invested," he says.

Korb imagines a scenario where a couple, in which both people are age 66 and entitled to the maximum Social Security earnings, delays payments until age 70. That would result in an increase of 32 percent in payments -- $845 per month for each person, or $1,690 for the couple.

If the couple takes that extra money, invests it in a Standard & Poor's 500 index fund and averages a 7.84 percent return after taxes over the years, they would be millionaires by their 92nd birthday, he says.

Korb's calculations do not account for Social Security inflation adjustments, meaning the couple could reach its goal sooner. His example illustrates the powerful financial benefit of waiting until age 70 to collect Social Security.

"What they are buying for that delay is a government-guaranteed inflation-adjusted annuity with effectively no risk," he says.

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