If you wait until 70 to collect and live to your mid-eighties, you win big. But who says you'll make it that far?
FORTUNE -- Year-end festivities are approaching, with Hanukkah lights nearing their peak, Christmas lights going up, and the New Year's celebration almost upon us. So what better time than the season of light is there to talk about ... mortality?
No, I'm not raising this gloomy topic just to be contrarian at a time of widespread celebrations. I'm raising it in Fortune's Investor's Guide because one of the most interesting investment decisions that you may have to make (or may have already made) involves estimating how long you're likely to live.
This decision doesn't involve stocks or bonds. It involves Social Security retirement benefits.
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Since I retired at 58 my SS projected amount hasn't gone up hardly any.If that doesn't change it might be pointless to wait beyond 62.
ReplyDeleteThere is a huge difference between collecting SS at 62, 65, 70. That being said, what is often overlooked in the calculations is the COLA increases, which over the past 30 years amount to a pretty nice annual raise.
ReplyDeleteMy Mother retired this year at 60, using my Father's SS. What she collects today, at 60, is the same amount she would have had to wait until 70 to collect using her own SS. Plus, the annual COLA increase will be based off a initial amount. She's in the "sweet spot".
For whoever is looking into it, take your time to look into what is best for you. I'm not saying wait til 70, either.
Sweet Spot? You've got to be kidding. The annual COLA raises are less than 10% of the ACTUAL increase in the Cost Of Living. For those of you who think this is a govt freebee, your need to take a few courses on economics and learn something about govt PONZI schemes.
ReplyDeleteFor those of you who think this is a govt freebee, your need to take a few courses on economics and learn something about govt PONZI schemes.
ReplyDeleteDecember 6, 2013 at 4:15 PM
It's a freebie for the government. They need to give my money back. They had no problem taking it out of my paycheck each week.
Now that I'm older and disabled they want to drag their heels. SOB's.
Everyones situation is unique.There is no silver bullet.
ReplyDelete415-Yes, sweet spot. Economics is different than arithmetic. By the time she gets to the age of 70, she'll be receiving a monthly SS much higher than if she had used her own SS.
ReplyDeleteUsing a discounted average COLA increase(considerably lower than the historical COLA % increase), along with the the higher base rate, she'll be getting 29% more than if she had waited to use her own SS at 70. In the meantime, a not too shabby "freebee" over the course of this decade, to the tune of nearly 250K.