Retiring With Lots of Savings? 2 Social Security Claiming Strategies to Look At.

There are many people who reach retirement without much or even any money saved. Folks in that boat tend to become extremely reliant on Social Security to cover their expenses once they stop working.

But what if you’re nearing retirement with a few million dollars to your name? In that case, your Social Security benefits might be extra money you enjoy having but don’t really need.

Image source: Getty Images.

That gives you a prime opportunity to play around with different filing strategies. Here are two you may want to consider.

1. File early and invest the money

Claiming Social Security before full retirement age, which is 67 if you were born in 1960 or later, results in reduced monthly checks. You can sign up as early as age 62, and filing at that age will shrink your benefits by about 30% compared with a full retirement age of 67.

But if you don’t need Social Security to pay your bills, reduced checks may not hurt you financially. And they could actually work to your advantage.

If you take all of the money and invest it, you might grow it into a large enough sum to make up for that reduction and then some. That’s not guaranteed to happen, but if you aren’t depending on the money, you can potentially afford to take the risk.

2. Delay your claim and grow your benefits

If you can easily pay your expenses without your Social Security benefits, delaying your claim until age 70 results in boosted checks. Your benefits will grow 8% for every year you hold off past full retirement age.

Waiting could pay if you don’t want to take the risk of investing your benefits but like the idea of turning them into more money. The 8% annual boost you get for waiting past full retirement age is guaranteed.

And larger benefits also mean larger cost-of-living adjustments each year. For example, if there’s a 3% adjustment one year, it’ll be worth more money if your benefit is larger than if it’s smaller.

Not needing Social Security for retirement income puts you in a very strong financial position. These are only two claiming options to look at in that scenario, so be sure to explore other possibilities that may work for you. The good news is that with a solid amount of savings, it takes a lot of the pressure off, allowing you to approach the decision calmly and methodically.