Why Your Choice: Take Soc Sec. at 62, Full Retirement Age, or 70? (hubby, mother)
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There is also the argument that if you "can" afford to wait to take ss, then take it early as there's a good chance it will be "means" tested down the road. And if you really can't afford to wait, then keep working and take it later.
I'm not sure I agree that if you don't have enough saved to go the three, four, or five more years, then you shouldn't retire now. If you have a defined benefit plan and that plan along with your ss payment at 62 if plenty to fund your retirement, then I think the argument can be made for taking the payment at 62...why wait 4,5,6 years to enjoy retirement while you are young enough to do it.
Now, if you have a wad saved, I can see your point. Spend it down in the early years and take ss later when you will get more. However, that "wad" can still earn investment returns so your argument still isn't necessarily the only way to to in my opinion.
one thing i want to mention about your hypothetical couple where they can retire fully funded on a pension and early ss.
think about this real life scenario.
if they can retire on the pension and need the ss money early because their savings are so thin they have no money to lay out to delay what happens in the event the spouse with the higher ss dies?
can the surviving spouse survive on one less ss check, a reduced benefit check at that ? if she isn't of full retirement age she has that one check slashed even more if she files for survivor benefits early.
perhaps even in that scenario they are really underfunded for an early retirement.
one thing i want to mention about your hypothetical couple where they can retire fully funded on a pension and early ss.
think about this real life scenario.
if they can retire on the pension and need the ss money early because their savings are so thin they have no money to lay out to delay what happens in the event the spouse with the higher ss dies?
can the surviving spouse survive on one less ss check, a reduced benefit check at that ? if she isn't of full retirement age she has that one check slashed even more if she files for survivor benefits early.
perhaps even in that scenario they are really underfunded for an early retirement.
Yes, but it could (and most likely will imo) get worse for higher wage earners. In fact two financial planners who I highly respect advise high earners to take it at 62...but the lower earners to keep working and take it later because they are convinced that there will be means testing (maybe more taxes, less benefits, etc.) for the higher earners in the not to distant future.....
Your two financial planners could certainly turn out to be right, but the truth is they are speculating about something which is very, very uncertain, namely what will happen in the national legislative arena. What will Congress do in two years? Four years? Six years? Eight years? No one has an answer to that.
It is awesome being 66 and knowing we get a biggggg income jump in 3 1/2 tears at age 70.[/quote
But less than the average return of the S&P or equivalent index over the last 70 years or so.
True but it is a fixed income stream for me and while my wife currently has her own SS and me spousal on hers she would get mine if I pass first. What you may not know is that we also have a sizable portfolio that because of our fixed income stream enables us to still be long term more aggressive. A lower fixed stream might require some dependency on a drawdown of our investments and a lower risk tolerance. Because of the now high fixed stream we are able to be in a permanent accumulation phase. We also have pensions with survivor rights.
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