For an investment return that tops those offered by hedge funds, insurance firms or Wall Street banks, baby boomers should look to Social Security.
That’s right: The same math that is driving Social Security costs higher can provide fat returns for people approaching retirement. All you need is a way to make ends meet while delaying the start of Social Security benefits from age 62 to as late as 70.
Sure, those who defer will miss a bunch of checks in the early years—but then will lock in bigger payments for life. This trade-off can be calculated as an investment return, just like a bond yield.
I asked John Shoven, director of the Stanford Institute for Economic Policy Research and author of numerous books and studies on Social Security, to perform such an analysis. The numbers might come as a surprise.
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