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not quite . you need to live on something .so you either live on the ss and spend the portfolio or spend the portfolio or other income sources that could have been invested and were not , and save the ss . so either way it is a wash .
no matter what you do the internal rate of return on ss is what it is regardless if you spend it or save it . you can see that here . your return is your return no matter what you choose to do with the money .
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Not sure what these graphs are measuring as they are not labeled, but if crossing the line indicates "break even", then it's between 17 and 22 years past 70.....and right now, inflation is lower than 3%, and 6% growth is a conservative estimate, IMO, so it's probably even later.
The point is the break even is a lot later than most people will live.
23 years roughly spending down a balanced portfolio to delay until break even . but as i said it is not about breaking even . it is about do you want market risk more or more guaranteed income for the same size pay check .
it really is about the composition of your income and what you want to take on more of in most cases .
This absolutely not meant to be personal or demeaning. Your math is pretty bad. (Or I don't understand your point.). As a female you have, on your own, a greater than 50% chance of living to 86, if you are healthy. If you smoke and drink a lot, or do drugs. (wild lifestyle) then, of course, take it earlier. But only because you won't need it later, as you will be dead. It has nothing to do with break even. There IS less incentive to file later as a single than as a couple. That is true of any annuity. Delayed SS just happens to be by far the most bang for the buck annuity that exists today, because the SS rates haven't changed, but the financial environment has. During the high infaltion of the late 70s early 80's, delaying made much less sense, especially as you could file at 62 and pay it all back at 70 and get the higher rate.
Second, whether you compare either early and late file not invested, or the smaller amount invested for 8 years longer, and the larger amount for the shorter period, the "break even point" is the same. That is why they show it that way.
If you can afford to live without SS, and want a COLA annuity, delay.
No offense taken. You must be misunderstanding, because I don't understand your response (could be the early morning hour and lack of coffee).
Just trying to point out that any given individual in their 60s (when these decisions are made) has a considerably less than 50% of living to 90. Way less in many cases.
Secondly, imo, most people fail to realize the opportunity cost of using their own monies (which could otherwise potentially grow into a sizable nest egg) for the period of delay.
23 years roughly spending down a balanced portfolio to delay until break even . but as i said it is not about breaking even . it is about do you want market risk more or more guaranteed income for the same size pay check .
it really is about the composition of your income and what you want to take on more of in most cases .
So 23 years past 70?
And I agree it's more than just the break even. But for those of us fortunate enough to not have to rely on SS, it's a much simpler decision. I think the chances of me living to 93 are under 10%. In my case, if I make the wrong bet, there will probably be no lifestyle consequences. I realize it's a more complicated decision for couples and those who are more reliant on SS.
23 years figures delaying 8 years and spending down a balanced portfolio to live on until the 70% bigger check plus colas kicks in .
inflation is irrelevant to social security . it is adjusted by the same amount so the real return stays constant . if inflation goes up it is a wash .
on the other hand lower inflation means lower rates on the balanced portfolio and depending why inflation is dropping stocks may go up or down . so higher or lower inflation can see the balanced portfolio do better or worse.
it is just a question of what you want to be more dependent on , markets or longevity or a balance somewhere in the middle .
Dang it. I must have been confusing various income limits.
I thought if you worked and collected SS early the income limit before they holdback the 1 for 2 was 25K. But it's only 17K? Geez.
There goes the idea of working and collecting early at 62. Or working while collecting period, at any age.
Given that I want to retire at 65, and my FRA is 67. Collecting while still working ain't gonna happen.
(My FRA 66 co-workers who worked and collected were exstactic at the thought of it.)
No offense taken. You must be misunderstanding, because I don't understand your response (could be the early morning hour and lack of coffee).
Just trying to point out that any given individual in their 60s (when these decisions are made) has a considerably less than 50% of living to 90. Way less in many cases.
Secondly, imo, most people fail to realize the opportunity cost of using their own monies (which could otherwise potentially grow into a sizable nest egg) for the period of delay.
by age 65 a woman has a 54% chance of seeing 85 but a couple a 74% chance . either one in a couple can out live the other really beefing up the odds .
someone in a couple has a 47% chance of seeing 90 , a single woman 33% .
by age 65 a woman has a 54% chance of seeing 85 but a couple a 74% chance . either one in a couple can out live the other really beefing up the odds .
someone in a couple has a 47% chance of seeing 90 , a single woman 33% .
Yeah, thanks for the research. I figured I didn't stand much of a chance of living into my nineties. It really is a much more involved decision for couples, much like the LTCi debate.
Dang it. I must have been confusing various income limits.
I thought if you worked and collected SS early the income limit before they holdback the 1 for 2 was 25K. But it's only 17K? Geez.
There goes the idea of working and collecting early at 62. Or working while collecting period, at any age.
Given that I want to retire at 65, and my FRA is 67. Collecting while still working ain't gonna happen.
(My FRA 66 co-workers who worked and collected were exstactic at the thought of it.)
they have special rules for your fra year though . up until you are fra, the year you will be fra allows 45k . other wise it is quite low at 16,920 or so .
dont forget though the amount is prorated . so i will be 65 in october . i am also starting to collect in sept , so i can earn a total of 5640.00 between sept. and the end of the year .. the 16,920 is prorated .
then in january i can earn almost 45k until i hit fra .
^^ Thanks Math.....but for me it's still not going to happen.
I know you wouldn't think one year would make a difference. But I have no intention of working until I'm 67, just so I can 'double up' -- and work AND collect. Forget that.
From time to time I've thought -- IF my FRA had been 66, I MIGHT keep working to get to 66 -- so that I could work and collect for the one year from 66-67.
But with an FRA of 67....I have to work from 67-68! to get to my 'double up' year. Forget that. My plan is to just go ahead and retire at 65, when I can get Medicare -- and just call it a day, and live my happy non-working life.
As a late wave baby-boomer, I feel like I'm either getting scre wed or going to get scre wed by having to work longer than others did to get the same option. Heck, I'm "only" 57 and have to pray they don't change the Medicare and/or Soc Sec. rules before I get there.
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