Alicia Munnell’s Social Security Bridge v. Annuities Income Planning Smackdown
January 8, 2020 by Allison Bell
More U.S. retirement savers should probably buy ordinary annuities before they retire, but they don’t, and policymakers need to come up with an alternative, according to Alicia Munnell, a top academic retirement policy researcher.
Munnell — director of the Center for Retirement Research at Boston College — says she thinks promoting use of “Social Security bridge” arrangements may be the best solution.
A Social Security bridge is a mechanism for helping retirees put off claiming Social Security benefits, by having retirees make regular withdrawals from retirement assets between the day they retire and the day they file for Social Security benefits. She notes that retirees can increase monthly benefits amounts by 76% if they begin collecting benefits at age 70, rather than at age 62.
Munnell teamed up with two colleagues to publish an academic analysis of the Social Security bridge concept in October. In December, she gave a presentation on the concept, at a policy forum in Washington that was organized by the Employee Benefit Research Institute.