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We all have asked this question in regards to our own situation. There is no easy answer. There is only a best for you answer but this particular link and piece suggests taking it sooner rather than later is the better choice but also points out the benefits of waiting as some professionals suggests.
The piece opens with this and it is quite telling as to how in depth the report will go.
Quote:
This retirement planning analysis proves you should always take your retirement benefits as soon as you can. Note that this recommendation is not to stop working and retire as soon as you can collect Social Security retirement benefits. You should still keep working if you can, want to and/or need to.
Several of the most popular methods of performing the analysis are detailed below.
This is the first time someone has actually crunched the numbers, to prove which annuity strategy is optimal, and then put it in a place that stays put long enough for you to thoroughly evaluate it.
I read the report over a few days twice and found it quite informative. In fact I plan on sending it to my financial advisor so that he can use it in the future. It is well written and I think it has facts and figures to back up its advice. I remember and I am sorry I don't remember the C-D member name (my apologies) advocated just that with numbers of their own. Since this question has not been put here on the retirement forum exactly as I wrote it, maybe those who search for this information will find it and find it helpful.
it all depensds on the assumptions made . this isn't the first time someone crunched all the factors they can think of . kitces did it a while ago .
on the other hand kitces's study shows delaying is far and away the better choice hitting stock like returns on what amounts to a gov't bond if even one person in a couple makes it to 90 . a 47% chance which is still pretty high odds . if i was a single male i would not look at those real returns as being countable ..
there is a difference in assumptions that conflict the 2 calculations . . i have to say i agree with kitce's work up more .
results of kitces study show 5% real returns are gained by age 90 , still coin toss odds for a couple and 6% if you make it until 95 . real returns are after we subtract inflation . 5 to 6% are stock like real returns with NO SEQUENCE RISK allowing higher spending through retirement just because you do not have to factor in down years on the ss portion ..
using fidelity's new social security optimizer there were big difference for us delaying when spousal benefits were included . we had not only higher differences in draw and balance but much less dependency on markets and interest rates along with reduced sequence risk , all very important factors and in fact market dependency is the main reasons we are trying to delay . .
this is kitces's conclusion and assume 3% inflation and spending down a balanced portfolio to delay until 70 .
Last edited by mathjak107; 04-08-2016 at 05:07 AM..
It all depends on your mathematical models and you must pick numbers that have a lot of uncertainty.
But the most important numbers are the dates of your and your spouses' death. You should objectively look at your health, physical condition, family history and your level of stress. There are a number of sites out there to help.
Of course, the lowest risk is to assume you'll live to 100 but very few people make it that far. I've read stories about people who lived like paupers and died with millions in the bank.
The truth is that most people start SS by FRA. Only about 5% delay beyond that age.
we looked at the numbers up to average life expectancy and projected only that far out . delaying as long as we could plus manipulating restricted application worked out the best .
if one of us lives past average the deal only gets sweeter .
As somoene with limited funds my plan at this point is to get to 65, see where we are, and probably file at that age. I agree with MJ that spening down to wait will leave you unprepared for big expenses down the road. Still the appeal of a larger check forever while avoiding the torpedo tax is strong.
no one should spend down to delay if it eats to much of their savings . , that would be very dangerous .
we like the fact we get to spend more early on by delaying because so much less powder has to be kept dry for sequence risk then if we are more dependent on markets by filing early
The tough thing for all of these models is how dicey predicting is right now. I do not pretend to understand all of the things that go into different prediction models, but my FA tells me that a few trends that seem to have some correlation based on logic and historical data have not been reliably tracking with each other for some time.
By many, many historically predictive valuation measures, stocks are overvalued to the tune of 75%-100%.
I am not trying to alarm people as much as point out that you may think that analysis is garbage or you may be shopping for a strong box and a working farm. Or somewhere in between. You can make a pretty good case for any of the alternatives because it is all crystal ball woo at some level.
that is our feeling too . i rather take on more longevity risk delaying at these valuations then more market and interest rate risk
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