77% Potential Increase In Social Security With A Single Premium Immediate Annuity (SPIA)?

How to increase your monthly Social Security check by up to 77% potentially with a single premium immediate annuity (SPIA)  👉 that's what we'll be covering in today's video, including the payout option that you should choose to get the potential maximum payout from your SPIA and your Social Security check, as well as some key factors to consider before implementing a SPIA-to-Social-Security strategy.

Transcript

SPEAKER_00 0:00

Boosting your social security check by up to 77% potentially. Let's talk about the quote secret unquote SPIA to Social Security bridge that's getting more popular. Hello, Diamond Nestec members, Super Savers and Course fans. I hope you're healthy and well. So, as our Diamond Nesteg regulars know, one of the reasons many retirees and soon-to-be retirees buy single premium immediate annuities, SPIAS, is to create a guaranteed lifelong income stream. But that's not the only way you can use a SPIA. Did you know that a SPIA can also be used to increase your monthly Social Security check by up to 77% potentially as well, if done the right way. And with SPIA rates higher in recent weeks than they have been over the past few decades, this so-called secret SPA to Social Security strategy might be something to consider if you're currently planning and strategizing about your retirement. Now, the strategy isn't really secret, but it's definitely less widely understood than it deserves to be because who wouldn't want to maximize their Social Security checks, right? The key is to delay taking Social Security until you turn 70 to maximize your monthly payout and to use a SPIA to bridge the potential income gap between retirement and the first Social Security check. You see, while a SPIA can be used to generate a lifelong income stream, there are other payout options as well. For instance, you can select a certain predefined payout period in advance, meaning the number of checks that you will get so that your monthly SPIA payments start when you retire and lose your regular paycheck and end when your Social Security kicks in. So with that in mind, here are the three topics I'll be covering today. One, how can you use a single premium immediate annuity, a SPIA, to increase your monthly Social Security check by up to 77% potentially? 2. Which payout option should you choose for this so-called secret SPIA to Social Security strategy? And three, what are some key factors to consider? Let's dive in now, folks. How can you use a single premium immediate annuity, a SPIA, to increase your monthly Social Security check by up to 77% potentially? Let me explain how the strategy works with an example. As many in our community are aware of already, the later you start taking Social Security income, the larger your monthly checks will be. Here's the official table from the Social Security Administration as shown on their website at the time of this taping on April 10th, 2026. If you want to retire at age 62, the earliest possible age for someone born in 1960 or later, then your monthly check may only be 70% of what you might get at your full retirement age of 67 years. And just to be clear, your monthly Social Security check will then stay at only 70% for the rest of your life. It will not catch up with the higher percentages that you would have gotten had you waited longer. But the good news is for every year that you delay taking Social Security, your benefits, your monthly checks, will grow by 8%. This means that if you wait as long as possible until age 70, your monthly check may grow to as high as 124% of what you would have gotten at full retirement age, depending on your personal circumstances. So 124% at age 70 versus only 70% at age 62. That's 77% more for every check that Social Security sends you for the rest of your life. Here's an illustration of what the numbers could potentially look like. Let's assume that your full retirement age is 67 and that the monthly Social Security check that you would receive if you claimed at age 67 is$1,000. Based on the percentage differences we just shared with you, this means that if you start taking Social Security at age 62, your monthly check would only be$700. Delay taking Social Security until age 70 though, and your monthly check could be as high as$1,240 potentially. And as we just discussed, this translates into a 77% increase in monthly Social Security payments for the rest of your life, for as long as you receive Social Security checks. If you delay claiming Social Security by 8 years. So, all else being equal, it might make sense to delay taking Social Security, right? But if you still want to retire from your job at age 62, this may also mean eight years without a regular income, which can feel scary, and that's exactly where SPIA may help if you use it the correct way and choose the right payout option. And what this usually means is choosing a payout option that does not guarantee you a monthly check for life. Bringing us nicely to the next part of today's video. Which payout option should you choose for this so-called secret spia to social security strategy? As I mentioned towards the beginning of this video, those who've been in the know and have delayed taking Social Security to maximize their benefits have been using the so-called secret or not so secret anymore, SPA to Social Security strategy for many years now to guarantee themselves a stable check every month, even while they bridge those non-working years between retirement and taking Social Security. SPIAs in general have gained a fair bit of momentum in recent years, with interest rates and therefore annuity rates at two decade level highs. But when you buy a SPIA for the purpose of delaying taking Social Security as late as possible so that you can get as big a check as possible, you would structure the SPIA payout a bit differently than you would if the goal of the SPIA was a guaranteed lifetime income. And what you would do is select a SPIA payout that would give you your monthly checks only for a specific period of time. Five or eight years would be common choices. But your trusted annuity advisor may be able to find you an attractive offer for however long you personally may need to get you to the point when you will start claiming Social Security. And the reason for doing it this way is because all else being equal, a limited time payout period will give you the highest monthly income relative to the other payout options that are generally associated with a guaranteed lifetime income. And this makes sense, right? Because you will get less monthly checks than you would over a lifetime. The industry calls this limited time payout option period certain, and it can be used for other purposes as well, and not just to create a bridge with a guaranteed income while you delay taking Social Security. Make sure though that you do not confuse period certain with life with period certain. This life part is very important. For SPIAS, a period certain payout means that you will receive monthly checks for only the guaranteed minimum period, which can be five or eight years, or potentially somewhere in between, or even longer or shorter, depending on the insurance company that you're working with. After the guaranteed minimum period ends, your monthly checks stop, even if you're still alive. Compare this to life with period certain payout. This means that you will receive monthly checks for at least the guaranteed minimum period. Again, this can be 5, 8, 10, 15, or more years. Although 10 and 20 are typically the most commonly chosen for life with period certain. After the guaranteed minimum period ends, your monthly checks will keep coming for as long as you live. And under both options, if you were to pass away earlier than expected, your monthly checks would go to your beneficiaries until the guaranteed minimum period ends. As I mentioned before, a period certain payout will normally give you the highest monthly income relative to the guaranteed income for life payout options, all else being equal, because the payments from a period certain payout will only be paid for a certain predefined period of time. So let's say for example that you're 62 now and planning to retire, and you don't want to take Social Security until you're 70. You could get a SPIA with an eight-year period certain. What this means is that you will get your monthly annuity checks for the next eight years until you turn 70, at which point your annuity checks would stop and your social security checks would start. The latter at the now higher percentage rate, of course. In the event that you were to pass away before the SPIA's guaranteed minimum payment period of eight years, your monthly annuity checks would still continue to be paid to your beneficiaries until the end of year eight. And of course, the shorter the period certain is, meaning the shorter the guaranteed minimum payment period is, the higher your monthly checks will be. So a SPIA with an eight-year period certain will pay you more every month versus a SPIA with a 10 or 15 year period certain. And if at this point you're wondering what the best payout option might be for you personally and what those monthly checks might look like under different scenarios, regardless of whether your goal is to delay claiming Social Security with a SPIA or perhaps even to generate a guaranteed lifetime income, then email us at jenniferdiamondnestec.com so that we can connect you with our trusted annuity specialist. Because as we like to say at Diamond Neste, annuities come in many different flavors. So now that you know this not so secret SPIA to Social Security strategy for delaying and maximizing your Social Security benefit, let's move on to the next part of today's discussion. What are some key factors to consider? There are five main potential advantages of the SPIA to Social Security strategy that we've been discussing in today's video. As I already explained in detail, the first and probably most important point is that a SPIA can help you to delay Social Security benefits and potentially increase your monthly Social Security checks by up to 77%. Second, the monthly checks are guaranteed, stable, and predictable with the right SPIA. Once you've signed your annuity contract, payments don't fluctuate with the ups and downs of the market. Third, you may have to worry less about systematic withdrawals or sequence of returns risk in early retirement. For instance, you may not have to sell your investments every month or worry about how the market is doing and what happens to taxes when you withdraw. Fourth, a SPIA may also allow you to invest more opportunistically in the equity side of your portfolio. This does not apply to everyone, but for some SPIA buyers, having their basic ongoing expenses covered every month via their monthly SPIA checks means they have a bit more wiggle room or appetite to invest in higher yielding products, for example, than they otherwise would have. Because as our Diamond Nest Egg regulars know, higher returns come with higher risk. One word about inflation though, and this will be more relevant the longer your payout period will be. Yes, some annuities come with inflation riders, but personally, this is not something I generally recommend because based on our experience and what we've seen in the market, these inflation riders are often not cheap. In addition, inflation protection is not the purpose of an annuity, at least not the fixed annuities without fees that we've talked about on our channel up to this point in time. But if you consider your guaranteed monthly checks from an annuity as your stable baseline, you might then use the rest of your portfolio to stay invested in equities or tips or maybe even REITs or other investments that may help you to balance out the inflation risk overall. And some of these may even generate some additional growth as well. Or as we tell our clients, build your base and grow the rest. What we call our base plus plus strategy. If you have a catchier name, leave a comment below because we've been scratching our heads here at Diamond Nestec looking for something that flows off the tongue a bit better. Basically, in my mind, you should buy an annuity for what it's designed to do. A single premium annuity, a SPIA, is designed to guarantee you a fixed predictable income for a specific period of time or for life. A multi-year guaranteed annuity, a MIGA, is designed to protect your principal while offering higher rates than treasuries andor CDs usually. A fixed indexed annuity or FIA is again designed to protect your principal while allowing for market participation up to a certain cap. And a qualified longevity annuity contract, a QLAC, is designed to give you a lifetime income stream in your much later years while helping you defer RMDs and taxes. Buy these annuities for these reasons here that they were created for, and buy I bonds, treasury inflation protected securities, tips, and stocks for inflation protection. This is something that I personally feel very strongly about. That said, everyone's financial journey is different and you may feel differently. Ultimately, the decision is yours to make based on your personal situation. So on to the fifth advantage of the SPIA to Social Security strategy. It may also potentially protect against longevity risk. Yes, the monthly check stop after the minimum guaranteed payment period is over with a SPIA that has a period certain payout, the type of payout that's generally used in a SPIA to Social Security strategy, as we explained in the previous section. But the larger Social Security check that you may get as a result of the SPIA to Social Security Strategy means that if you live longer, your larger Social Security check may cover more of your expenses in your later years. As with everything in life though, the SPIA to Social Security strategy is not just all roses and sunshine. There are other factors to consider. So before you run out and buy a SPIA so that you can potentially increase your monthly Social Security check by 77% when you claim at age 70 versus when you claim at age 62, here are five questions to ask yourself. Question one, how long do you expect to live? Of course, no one knows exactly how long he or she will live, but you may develop a personal outlook based on observations. Say, for example, like practically everyone in your family living close to 100, or that you're still running regular marathons in your late 50s or early 60s. If this is you and you're more conservative and want to err on the side of safety, it may not be unwise to consider delaying Social Security with a sphere so that you can maximize the Social Security checks you get for life. If, on the other hand, practically everyone in your family passed away at a relatively young age, or if you have serious health issues, then you may come to the opposite conclusion and take Social Security earlier rather than later. Question two, how much and for how long do you want your SPIA checks to last you? This is not only useful for budgeting purposes, it will also help you figure out how realistic your numbers are because at the end of the process, you will know how much money you actually need to put into a SPIA to get to the monthly check you're shooting for. And if the amount that you need to invest in the SPIA is significantly more than you have at your disposal, you'll need to go back to the drawing board and figure out ways to either lower your expenses or increase your income. Meaning work a bit longer, perhaps work part-time, or maybe even take Social Security a bit earlier than you had hoped for. Question three, do you have other assets that you might be able to draw on? Remember that when you buy a SPIA or any other annuity for that matter, you will usually have a 30-day free look period during which time you can change your mind for any reason and ask the insurance company for your money back. In addition, the monthly check you will get from your SPIA is fixed, as I mentioned earlier. A SPIA is not like a bank account where you can just put money in andor pull money out when you need it. What this means is that if you ever need extra cash, for example, for unexpected medical expenses, emergencies, and so on, you will need to pay for this with other assets in your portfolio. So, as with all phases in our life, it's important to have an emergency fund and or other liquid assets to supplement your monthly SPA check. Question four, where are interest rates currently? As our Diamond Nesteg regulars have heard me say often on this channel, annuity rates typically track interest rates, and interest rates are higher now than they have been on average over the past two decades, which means annuity rates are also at good levels at the time of this taping on April 10th, 2026. But depending on when you're watching this video, the situation may be different. As always, email us at jenniferdiamonestic.com if you're interested in getting connected with our trusted annuity specialist to see what the latest rates and payouts look like, because there's no one size fits all cookie cutter annuity solution. Any annuity you buy should be customized to your individual circumstances, goals, and expectations. Moving on now to question five. What is the financial strength of the insurance company that you're buying your SPIA from? Meaning what is their credit rating? All else being equal, the higher the credit rating, the stronger the company will usually be financially, and the safer it is, which means the lower your monthly checks will most likely be. For a fixed income community, this is similar to bonds, where the higher the credit rating of the bond issuer, the lower the interest rate you will typically get on that company's bonds. Whereas the lower the credit rating, the more the bond issuer, like the insurance company, has to pay a risk premium to entice customers to buy. Lower-rated insurance companies have to basically pay more of a risk premium, just like lower-rated bond issuers. And that's why we normally only work with the most highly rated insurance companies, both personally and professionally. The way we see it, annuities provide safety and predictability. If we want to take on risk, we'll do that in other parts of our portfolio and get the higher returns there, as I touched upon already, and not via a lower-rated insurance company, which may put the safety and predictability of our annuities and other insurance products at risk. This is important for all insurance products in our mind, but in particular with a SPA where the transaction is irreversible and the guaranteed monthly checks, either for a specific period of time or in many cases for life, is what you're depending on for your livelihood. Of course, state guarantee associations will protect you up to certain limits if your insurance company were to ever go bankrupt and not be able to pay you the monthly checks due to you. But remember that this is a backstop. It is not a perfect substitution for a financially strong highly rated insurance company. So if you're planning on investing large amounts into a SPIA or any other type of annuity for that matter, the wisest thing to do in our mind is to spread your investment across multiple highly rated insurance companies so that you stay below your State Guarantee Association's thresholds with each one. Alright, Diamondestic members, Super Savers and Course fans, I hope you enjoyed our big reveal on this no longer secret SPIA to Social Security strategy today and that you learned something new. Drop a comment below if you have any more annuity questions, or email us at jenniferdiamonestic.com to get connected with our trusted annuity specialist and find the best annuity solution that's out there for you right now. And see you again soon with more brand new wealth building content for your financial journey.