# Social Security example - Am I missing something? **URL:** \ **Category:** Factual Questions\ **Created:** [May 8, 2021, 7:56pm UTC](https://boards.straightdope.com/t/social-security-example-am-i-missing-something/941680 "2021-05-08T19:56:00Z")\ **Posts on this page:** 1\ **Showing post:** 49
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [May 12, 2021, 10:51am UTC](https://boards.straightdope.com/t/social-security-example-am-i-missing-something/941680/49 "2021-05-12T10:51:33Z")
Excellent points both. Thank you. As to your first I’d emphasize the risk profile, which you do mention. In a good market it’s pretty easy to make 8% with low short-term risk. In a poor market that’s a _very_ tall order. Which also ties in with your second point, that sequence of returns risk is _the_ gorilla in the room between about retirement date minus 5 years to retirement date plus 5 years. Get that right and your “golden years” will be all that much more golden. In a recent SS thread I wrote > [@Retired Dopers: how did you decide when to retire?](https://boards.straightdope.com/t/retired-dopers-how-did-you-decide-when-to-retire/939207/134): > > When I was 40 I too assumed it would not be there. At now 62 I’m mostly sure most of it will be there for most of my out-years. But I have planned for not having it, been fortunate and disciplined enough to now be able to do without it, but also mostly expect to enjoy my share of the windfall when it occurs. As an aside… The percentages @Tamerlane quotes are enshrined not in law, but in SSA internal regulations / procedures. When those numbers were computed many years ago, the idea was to m… Which details that the 8% figure is a bit of a historical fluke; the original intent was to offset actuarial risk only, such that statistically whether you took it at 62 or 70 you’d end up with the same total inflation-corrected payout (or more formally, any start date from 62-70 gave the same NPV at start under their assumptions). It was only with the collapse of interest rates that the chosen number turned SS into an almost-riskless yet high-return bond-like asset. Which makes a nice windfall for those able cashflow-wise to delay the gratification. My subsequent post in that thread may also be of value to the OP. You and I also had a couple of excellent exchanges elsewhere in that thread. Here is an interesting post by my favorite financial blogger written for CFPs about viewing SS as an annuity asset, because that’s exactly what it is: > **[Valuing Social Security As A Retirement Income Asset](https://www.kitces.com/blog/valuing-social-security-benefits-as-an-asset-on-the-household-balance-sheet/)** > > While Social Security benefits are an income stream that is not liquid, they are still a significant asset on the retiree\\'s personal balance sheet! All this is more evidence for the contention so many of us share here, that simply looking at SS as “What’s my cashflow breakeven age and do I feel lucky enough to get there?” is using tic-tac-toe strategy when the game is really chess. Assuming one is fortunate enough to have any choice beyond “Grab what I can get as soon as I can.” --- _[View the full topic](https://boards.straightdope.com/t/social-security-example-am-i-missing-something/941680)._