Social Security Advice

Unless you plan to live to be very old, it still doesn't really pay to wait until age 70 to collect your social security benefit. For example, let's say your full retirement age is 66. If at 66 your social security payment is going to be $2,000. If it is 32% higher if you wait until age 70, that means your monthly benefit will be $2,640. I agree, the $640 more a month sounds pretty good. However, from age 66 to 70, is 48 months, so $2000 per month for 48 months is $96,000. If by waiting you are making $640 more per month, that means your breakeven point would be 12.5 years.


I think the average life expectancy for a male is like 76 years and a female is 82 years? So waiting until age 70 to draw your benefits, would mean you would have to live to 82.5 years to break even. For a female that's very close to break even, but for a male that is still 6.5 years away from the breakeven even point. So unless you believe you will live beyond age 82.5 years old, you are better off just drawing your social security at age 66 and investing it elsewhere.


It all comes down to what you are willing to risk. If you have a lot of longevity in your family, maybe it's worth it? (Although my mother's parents lived to 98 and 100, still didn't stop my mother from dying at 66 from cancer!)


Neil Lock Added Oct 9, 2018 - 5:00pm
Here in the UK we have a similar system. If you defer taking your state pension after the age it is "due," you can get more when you finally do take it. In the UK, it is 4.8% per year, and you can decide each year.
However, this begs two questions:
(1) If government-caused currency inflation is worse than 4.8% per year, you will lose rather than gain.
(2) If government decides to increase pensions in line with "inflation," a political necessity, then you will lose the difference between the true inflation rate and the one they quote (which is always less).
Both my parents died aged 86, so maybe I should base my actuarial calculations on living another 21 years... But no, the whole system will collapse well before then.
Ward Tipton Added Oct 10, 2018 - 1:36am
Social Security has turned in to the biggest ponzi scheme in the history of our nation.
TexasLynn Added Oct 10, 2018 - 2:03pm
^&^%!  I just hope to make it to 66.  I really don't expect Social Security to still be around then.  Eventually one of these young labeled generations is going to see the writing on the wall and decided it's not worth it.
Bill H. Added Oct 10, 2018 - 4:51pm
Now that the Government is out to eliminate SS, better start collecting it as soon as possible.
Leroy Added Oct 11, 2018 - 7:51am
I'd like to think that the Millennials will pay for my SS.  Then, I think, "Oh, crap!" when I realize that I will probably be paying for their SSDI.  About a third of them are said to have a recognized disability.
But, to the point of this article, if I can make it to 70, I will wait.  Thinking beyond myself, it will benefit my wife and maybe my son.  If family trends continue, I will never realize the benefit but that's ok.