You just turned 66 and are still planning to work for another year or more. You can start taking your full Social Security benefits, but you don’t need them for your monthly expenses. What should you do with this extra income? Could it be possible to grow this income quickly but safely?

If you are in this situation, you are really looking at two options. You can put aside this money every month and end up with substantial savings, or you can delay taking your benefits for a year or longer. (For more, see: Introduction to Social Security.)

Social Security

Let’s say your monthly income from Social Security is around $2,000. If you are still working and don’t need this money, you can put it in a savings or high-interest savings account for it to grow safely and securely. The money in a savings account is considered safe as it is FDIC insured up to $250,000. But the return on your money is minimal—up to 1% if you put your money in a high-interest savings account. You can also consider locking your money in for a year or more in a certificate of deposit (CD), in which case you would be looking at a higher interest rate. Rose Swanger, a financial advisor with Advise Finance in Knoxville, Tennessee suggests, “There is a reason why it is called risk and reward in investing. If you want the money to be safe and earning some interest, CDs are probably a good choice.”

Another option to consider, and one that will give you the highest return on your money, is to delay taking retirement benefits from Social Security for another year or however long you plan to stay employed. “The safest way to grow your money ‘quickly’ over 12 months may actually be not to start taking Social Security” when you turn 66, said Ryan Fuchs, a financial advisor with IFRAH Financial Services in Little Rock, Arkansas. “Every year you delay taking Social Security from full retirement age, your benefit will be 8% higher. And, you lock that higher benefit in for life.” (For more, see: Maximize Your Social Security Benefits.)

There are no really secure ways to grow money quickly over a short period of time. “If you are dead set on taking the benefits [at age 66], unfortunately, there is really no way to grow the assets ‘quickly, but safely’ over the next 12 months. ‘Quickly’ means high returns, which typically equates with high(er) risk. ‘Safely’ means low(er) risk of loss of principal, which tends to equate to low returns,” Fuchs explained.

Larry McClanahan, a financial advisor with Second Half Planning and Investment in Portland, Oregon agrees. He points out that "growing fast but safely in 12 months is unfortunately a contradiction in terms, especially in the current investment environment. If you need that money in 12 months, put it in secure savings to be sure it’ll be there when you want it.”

The Bottom Line

Facing retirement, one has a lot of questions and concerns over their money. Good financial planning at this stage of life is essential. If your only income for retirement is from Social Security benefits you may feel safe knowing that if you save those benefits for a year you will have an extra $24,000 dollars in your savings account. If you put this money in a high-interest savings account or CD, you will accumulate some interest on your money.

However, if you really want to get a maximum percentage growth on your money from Social Security, it may be worthwhile to consider postponing taking the benefits if you are able. That way, you will be looking at an 8% increase on your retirement income for each year that you delay taking benefits. (For more, see: How Much Social Security Will You Get?)









Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.