“She will pay off her condo, worth $300,000, in three years.” (Photo subject is a model.) - Getty Images/iStockphoto Dear Quentin, My sister is 60 years old. She plans to retire at age 65. She is single and makes $55,000 a year. She will pay off her condo, worth $300,000, in three years. With her Social Security and pension, she will have $2,600 a month starting at age 65. Her expenses are about $1,700 a month, but she will be debt-free. Most Read from MarketWatch She has $40,000 in Treasury bonds, $2 ...

Core Insights - The decision to delay Social Security benefits can be more complex than it appears, as it may not always result in a higher total lifetime payout due to longevity risk [2][3] Group 1: Delaying Benefits - Delaying Social Security benefits can increase monthly payments by up to 8% per year if postponed past full retirement age (FRA) [1] - However, if an individual delays benefits until age 70 but passes away at 72, they would only receive two years of payments, potentially resulting in a lower total payout compared to claiming earlier [4] Group 2: Longevity Risk - Estimating longevity is uncertain, with the average life expectancy in the U.S. being approximately 78.4 years, but individual outcomes can vary significantly [5] - Many individuals may live into their 80s and 90s, while others may not reach the average life expectancy [5] Group 3: Breakeven Analysis - Financial advisors often use a "breakeven age" analysis to determine the age at which cumulative benefits from delaying Social Security exceed those from claiming earlier [6] - For example, an individual eligible for $2,000 per month at age 67 would need to live to about 78 years and eight months to break even if they claimed at age 62; if they wait until age 70, the breakeven age increases to roughly 80 years and five months [6]