In US: Social Security 62 or 66?

In My Humble Opinion
41

I believe that this analysis, the curve of utility, is a key factor. As has been stated, if the extra cash early in retirement makes a large difference then it is a good idea to avail oneself of that cash. If waiting doesn’t hurt, one will have more $ over the long term.

Now, if I could only figure out how to generate that curve…
:slight_smile:

Thanks all for this thread. It clarifies what needs to be considered in making this important decision.

  1. life expectancy
  2. Curve of Utility
  3. tax bracket-if the SS is taxed due to other income, that changes the calc.
    Coming up with individual results for criteria 1 and 2 isn’t easy, but doing so is the analysis.
42

I saw this article today that talked about the benefits of getting SS at different ages.

If you got $1200 at 62 you’d get about $1600 at 66, an extra $400/month. If you started collecting about 13k a year at age 62 (instead of waiting until full retirement age at 66) by age 99 you will have an extra $95,000 or so. Barely 1-3% of people live to be 99, that 95k is a massive best case scenario.

That is a decent amount of money, but over the course of a lifetime it really isn’t. Esp when you compare it to investing a smaller amount when you are young and letting compound interest double it 2-3 times by your 80s.

Doing a calculation at age 62 vs 70 ($1200 vs $2112/month) the break even point is 80-81. Every month after that you come out ahead by $912. That gives a better rate, about 196k by age 99.

Of course if you are a higher earner the discrepancy will be bigger. If you are a high earner with a family history of living to your 90s like Voyager you could come out ahead by $300k+ by waiting to 70 vs 62.

The point is, again, barely 10-20% of people live to be 90. Survival drops drastically in the 70s and keeps dropping. Also this all neglects the role of taxes, investing early income, what income bracket you are in, whether your benefits will be reduced due to work, etc. For me the appeal of working an extra 4-8 years (yeah right, nobody is hiring people in their 60s) to have at best an extra 50-100k over a lifetime (assuming I die in my late 80s) isn’t very appealing.

43

thanks!