I plan to take SS at 70. I am 7 years older than my wife, and have been the primary earner in the family. My plan is that when I am no longer alive, my wife will collect the higher survivor’s benefit for the rest of her life.
Also plan to take at 70, survival benefit is a factor. SS is the best annuity against inflation and longevity risk, can’t buy a comparable annuity these days. Also the problem with these financial analysts is it doesn’t fully take sequence of return risk into account.
Work till 70 or close to it and you won't need to pull little or any. Plus, you can actually put more in. Then you get the best of both and more. None of these planners talk about most people waiting till 70 will still be working, or the spouse still works. Doing these things will bring you way ahead of this, and if you are older and the major earner your spouse will have more and the ability to leave more to your kids. You can also save significantly if one spouse has Healthcare through work.
I've always planned to claim Social Security at 70 to get the highest benefit, but with inflation and rising healthcare costs, I’m wondering if that's still the best strategy.
Many retirees are reevaluating. The problem is that delaying Social Security assumes you’ll live long enough to make up for the years you didn’t claim. Plus, what if the system changes, or your other savings don’t perform as expected?
Exactly! I claimed mine at 67 and used the extra income to invest strategically. By the time I was 70, my investments had grown significantly, giving me more flexibility. I think waiting until 70 isn’t a one-size-fits-all solution anymore
Thank you so much for the suggestion! I really needed it. I looked him up on Google and explored his website; he has an impressive background in investments. I've sent him an email, and I hope to hear back from him soon
I wish I’d known about someone like him earlier. My biggest regret is not reinvesting after my initial losses. I stayed in cash, and with inflation, I feel like I’ve lost even more
I retired in 2016 at 62 and had to decide whether to take Social Security then or wait until 70. Waiting would have meant withdrawing the money from my S&P 500 fund over the last 8 years. I decided to take SS and watch my mutual fund grow, and grow, and grow. SS has deposited 96 checks into my account and my S&P mutual fund has almost tripled.
I waited to claim at 70 because: - I was in good health - Working enabled me to continued building wealth; rather than draining it - working filled in some zeros in my earnings history - We want to leave something to the children - I wanted the higher SSA benefit - The higher SSA benefit better protects us in a 'worst-case' financial scenario - I expect to received the SSA benefit for 16 years; at which point it goes to my 7 year younger wife for an expected 10 more years This was my decision. It may or may not be right for us - time will tell. My decision may not be right for you.
Agree with your reasoning as it applies to my experience. This guy forgets or fails to mention by waiting till 70 the benefit of providing a higher spousal benefit especially if the spouse’s benefit level is much lower. It’s a great legacy to leave as you mention.
At age 62 I was physically able to greatly enjoy the SS money. At age 70 and beyond my health and energy greatly diminished. But I have this somewhat bigger pile of money to look at from my rocking chair.
@@Tryp-j9d My mistake was not choosing parents with better genes. That's according to the heart valve surgeon when I asked why my valve fell apart. No drugs, no alcohol, always exercised...
Yes this guy is wrong! You will have higher RMD's, less SS money, and it will be 85% taxed due to a lower provisional income. Also, if married you might have screwed over your spouse since they will lose most of their possible SS survivor benefit.
The big thing you missed in this video is the fact that taxes on Social Security should be illegal in the first place. Double taxation is illegal and that is exactly what is happening. SS recipients have already paid taxes on the wages when they were working and now when retirees desperately need this income the most to live the government gives them the shaft! Retirement may become a problem for Americans
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
I completely agree; I am in my mid 40s, approaching retirement, and have approximately over 2million dollars in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, the Fin-advisor can only be neglected, not rejected. Just do your due diligence to identify a fiduciary one.
Very good video. One item not covered is that 85% of SS income is the most taxed for federal purposes and zero in many states, so compared to other income such as IRA withdrawals, having more SS income is beneficial (making deferring to 70 maximizing the payment and COLA). For me SS will be taxed at 20% vs 30% for other income (combined fed and state).
I am glad Jerry and Elaine are doing well. They probably will live a long time. Now we need to see one for George and Kramer with only 500,000 saved up for retirement and $2000/ month at 67. What if you keep working until 70? These computer generated returns are quite complex but adding real estate and capitol gains into the mix. Or change in spending. How about gifting to children or charities can you afford it. Thanks very much.
Factoring combined life expectancy for a couple increases the utility of delaying SS enough for me. It also allows room for things like Roth conversions that minimizes the RMDs.
I am 66.6. If I wait 3.5 years, I will draw $900. more a month. This is like having an additional $270k in the bank with a yield of 4% yield. I would feel like an ignominous fool if I lived to 70 and left $900 on the table.[Also wife is 12 years younger than I.]
This is pretty much the same situation that I'm in. COLAs are great..... but that near 8% increase every year, along with any COLA...IS a very good raise. But, I doubt that I can last more than two years.... (68 1/2) I know my wife is pushing me to start before that. MY health may not allow me to make it to my early 70s, too. Plenty of things to think about. I could use the extra money! BTW..... I don't get 8% increase every year that I wait. My math shows only around a 7% increase each year, to age 70.
No, it is not. Because when you die, or you wife, which could even be after you have collected three checks or even none, you will have nothing of that phantom $270k. You are confusing an annuity instrument, like SS, with the yield from an actual investment.
@scooter5940 Not confusing anything. Without the funds in the bank you don't get the yield. The present value of taking social security now will be expended on new house projects. Better to use the time to discipline.
This is good work. The two main uncertainties (assumptions) that impact the decision are return on investments and inflation rate. You did not show different inflation rates. (I believe higher inflation assumptions help the wait-to-collect scenario). Cheers.
If you take the money out of the traditional IRA or 401k first, the RMDs will be lower and taxes are easier to control. This recommendation to take it out of the taxable account first is wrong in this scenario.
In my case each year I work past 67 my benefits go up more than 8% because they pool the funds from your 35 best years. I am adding $109,000 a year to the pool (growing 3 to 4% a year from raises) and the income they are dropping from the 35th worst year adjusted for inflation is 40K to 50K. So my benefits are rising about 10.2% a year from 67 to 70.
My brother and sister in law delayed until 70. They got about the same amount from working. My brother died a year later. What a shame he did not take at 66 and did not enjoy his life a bit more instead of working until 70. Although he had plenty of savings, he was afraid to spend it. My husband and I took ours at 65. Like him, we have a good amount of savings. It is easier to spend “money coming in” even if it could have made more. We know our savings will go to our kids if we should pass early. Our 8% SS increase will not.
This is misleading. It is entirely dependent on assumptions. Yes, if you could guarantee a 8.5% return on the 401k you’d be better off taking SS early. But you might get a 5% return, in which case taking SS at 70 would be best. Taking SS at 70 offers insurance against the real risk that 401k returns will be low.
you could post pone taking ss and try to live off your 401 and suddenly the market crashes and your selling shares that are worth less, where as if you took SS early you'll forestall starting pulling from your 401 (or at least less from the accounts) and in a down market you won't be selling as much at a loss. Plus if you take ss early regardless of the market , that leaves more in your 401 to leave as a legacy if you desire doing that.
@@markbajek2541 you cash in your insurance policy (SS) when the catastrophe happens (e.g. market crash) not before. Until such contingency, the wise diligently pays the insurance premiums (by 401k withdrawals). when market rebounds you can reinstate the revenue insurance of SS through suspension/withdrawal of bennies
@@markbajek2541 Not if you use a bucket strategy where you minimize risk. I was going to take SS at 62. Stopped working for someone else at 55. After 7 years of withdrawing from my IRA I had more money than I had at 55. I decided to wait till 66 set up a 4 year cash bucket. Rinse and repeat till 70. My SS benefit went from 1750 at 62 to 4020 at 70.
Don't forget the word 'security' in your thinking. Having guaranteed income that is inflation adjusted and not dependent on market fluctuations later in your life is a great benefit.
Of course they both should have done a Roth ladder. But you miss the main value of SS. It is insurance, in case everything else gets wiped out or over spent and you then live to 100. It is the best and cheapest insurance there is and everyone should PLAN to take it at 70. This will also give you a bigger roth conversion window. And better help a spouse. If you die at age 70, it was still insurance you paid for with the delay.
I know that you're focused on Social Security here, but it would be interesting to consider the impact of siphoning money out of the 401K into a ROTH fund in the period between 67 and 70 years old in order to try to avoid some of the tax hit on Social Security Income (deferring SSI til age 70).
I retired at 61 1/2 and started collecting at 62. I'm 71 1/2 now. I friend of mine, who worked with me, wanted to wait until 70. He died at 69 and five months. Still on the job.
I appreciate your knowledge but when I retire all I will have left will be ss which should be at $3500 at 70. Also, maybe it’s me but at 80 how is somebody going to spend $100,000 unless they are traveling or gambling.
The factors that have the greatest impact on terminal worth are also the factors with the greatest uncertainty: how your portfolio will perform until your death, and how long you will live. These examples are fine for illustration purposes but the difference in results were minor compared with the differences yielded by the portfolio performance variable.
My plan is start my benefit at age 62. Since I was married more than ten years and won’t remarry until after age 60, I am eligible to stop my benefit and draw 100% survivor benefits if my espouse dies before me (as long as I am age 67 or higher). Since my ex will have a much larger amount; there is no reason for me to wait until age 70 to max my benefit (unless I think he will live a super long time).
If you’re 65 and in good health. A man will live until about 83 while a woman reaches 87. With many living well beyond those projections. If you spend retirement drinking Guinness and smoking Newports then you won’t make it that long. You have far more control over not only your longevity but your quality of life than you think.
That goes for a lot of things. A 401k is bad if you die before you retire That being said I plan to live a long time and save heavily and I am going to wait for 70 for Social Security (but not to retire).
@@Brigitte724 Don't mistake strategy with outcome I will delay Social security until 70 because that is the best strategy for me. If I die early I won't care because I'll be dead
However, if Jerry loves his gig and worked until 70, the sum in his retirement account is going to grow instead of drop. Also, he is contributing all savings into Roth. It’s just another scenario.
Don't know if I'm just being wrongheaded here, but $133K difference based on estimates that occur over 35 years, or more, seems to be insignificant. Either way, "he has won the game" of Financial Independence.
Good video but may I suggest a more conservative 4% to 5% growth on investments as retirement often means moving some assets to lower risk investments. One way to do that is simply drawing down your IRA and delaying SS and keeping investment mix the same which over time will be on a lower balance thus effectively reducing risk. The larger SS with COLA becomes your risk free portion of your portfolio. Other benefits include a larger survivor benefit for spouse, more income in later years in tax preferred assets (at most 85% of SS is taxable federally and zero in many states). Delaying also provides inflation protection via a larger COLA and the earlier IRA withdrawals may allow for Roth conversions to provide more tax free to heirs. As for the taxable brokerage, by not drawing that down it can also go to heirs with a step up in basis and you can harvest losses during your lifetime
Married senario makes SS is a life insurance policy in case you or your spouse lives longer than average. Spend down Pretax money, Especially in Jerry's case. Convert to Roth at the top of your bracket. Do NOT spend down after tax..These are taxed at a lower rate. You will then leave more tax free to your heirs in the future as Taxes will likely increase. Thank you.
Yes. I plan on delaying to 70 to maximize the survivor benefit but have my spouse claim earlier. That will give me 8 years to live off my IRA and lower the future RMDs. Each person has their own unique situation.
Yes if you need a Roth. I already have more tax free or high basis assets than I will ever touch, primarily life insurance and municipal bonds. I prefer my brokerage account over a Roth. It allows me to invest in assets that cause issues when held within an IRA, primarily MLPs. I also do not sell my stocks other than to harvest losses which you cannot do with an Roth and my heirs will get a step up in basis and can continue to hold the assets as invested without a need to withdraw them in 10 years.
@@Bondbeeryou are referring to the 62/70 where the lower income (normally lady, younger, stayed home to raise the kids for a paid of time) takes at 62 age the hight wage rather defers so when he passes, the lady gets the highest SS for the remainder of her life.
I have very modest savings and very modest expenses. Social security would cover all of my current expenses with a little left over at 70. It would cover most of my expenses, not my $176 a month car payment, at 67/68. I can also move from where I currently rent and cut $700-800 a month. The safety of the payments at 67 or later just can't be ignored. The thought of break even and leaving a huge sum of money for somebody else to enjoy is not a remote concern. I'm completely alone so no need for a legacy.
One thing that I never hear anyone discuss is, chances are both Jerry and Elaine will continue working until 70. That aside, why couldn't Jerry start pulling from his 401K first?
My retirement plan has always been simple. Do I have $100k/yr in base “savings” to last me till the day I die if I never earn a nickel in interest, dividends or gains. The answer is yes do I’m not concerned.
IF YOU CAN...wait til 70!!! if you can't, then take it when you need it. simple as that 🙂Most people (like me) are still working past 62, 65....so takiing SSN is a BAD idea.
If SS is a meaningful part of your retirement, don't hesitate to take it early. SS bennies are bound to be cut. Plus, if you don't need the money, you can invest it. And remember, for every year you delay, your life expectancy also decreases. Govt bean counters have run the calcs - statistically, the Average Person will get the same amount of bennies if they retire early vs delaying SS to 70. You simply never know how long you'll live.
Isn't the obvious answer to this, is to spend down (withdrawal, at least) the 401K before age 72? RMDs will be much smaller with the combination of a greater SS benefit.
In some circumstances, perhaps. Main problem I see with that is that you've completely forgone the tax deferral provided by the 401k by distributing the money early. If you're reinvesting it in a taxable account you'll be paying tax on every penny of interest, dividends and realized gains every year. Usually there's some happy medium in between leaving everything in the 401k and taking everything out by the time you're 72.
I don't get how taking more money out of a taxable 401K later while taking SS earlier would ever lead to lower taxes.... HOW? he will have a much lower "provisional " income due to a smaller SS Check, and he will be needing more than the amount that will trigger 85% of his SS to be taxed plus the taxes from the other money sources. I don't see it. He will be hit with higher RMD's due to keeping the 401K money in the account later in life, plus have 85% of SS taxed, and the SS amount will be smaller.
@@Satjr35031 So this couple is taking SS at 62 and getting $2500 per month x2.... yeah sure, that is basically impossible. the Average benefit at FRA of 67 is currently $1800, and taking it at 62 would be reduced by over 30%... so explain how many people you think could possibly have a benefit that big at 62? We are talking about most people here a not a couple that both people that made $160000 per year maxing out their lifetime benefit.
Agreed! We live in California (they do not tax SS benefits): Our combined SS income is projected to be about $90,000 (once we are both receiving benefits) along with $20,000 from RMDs from IRAs; our combined taxes are projected to be $1560 and $100 totaling $1660 (Federal and State). Our effective tax rate will be 1.5 % on $110,000 income! So if you had the same $110,000 pre-tax income but split with $50,000 SS and $60,000 RMDs and/or withdrawals from IRAs, your tax would be $8,263 and $858 (Federal and State) totaling $9,121 or an 8.3% effective tax rate or $7,461 MORE in taxes on the exact same income. That is how provisional income works, the more income you have from SS vs IRAs the lower you are taxed. I will start my SS next year at 70, my wife will start hers between 64-66 (haven't decided yet) she's 6 years younger. We are taking advantage of the 8 years from when I turned 62 and 70 by chipping away at our IRAs with Roth Conversions and withdrawals for our wants and needs. Thus, reducing our RMDs when turning 73 and 75 ( wife was born after 1960).
There are too many variables to derive an optimum plan. I was originally planning to wait until 70 to collect SS with the intent of leaving my younger wife with a higher SS check when I'm gone. Also, if one does not distribute their 401K/IRA early on and waits for RMD's, they lose the Roth conversion option on the RMD amount. It seems to me there are a few guidelines to follow and that is about as good as anyone will get to optimizing their retirement plan. 1. get your money out of your IRA and distributed into a Roth as soon as possible with the least tax consequence and avoid high RMD's. 2. Take your SS at FRA. 3. Stay at least 50/50 with your stock/bond allocation. 4. Try not to pass taxable assets to your kids. 5. Prey that Trump keeps his word about eliminating tax on SS.
I am interested to know how a pension would affect this scenario. I am forced to contribute to SS AND my teacher pension. They both have a cost of living adjustment. How will this affect my taxes when I start receiving both benefits? My state includes SS and pensions in earned income.
I’ve been watching a lot of these videos…..62 or 65, 67, 70? It basically doubles waiting until 70. No one spends much, if any, time on health insurance. So far I can only guess the suggestion would be to get a Medicare advantage plan if filing at 62.
A few assumptions you made may not be appropriate. If someone delays claiming SS until 70, and keeps being employed, he will not draw down his taxable investment account, and the SS will not push him to a higher tax bracket. If someone is not work, does not have other income and want to delay SS claim until 70, he should withdraw from 401K first, so tax rate is lower. The statement that always withdraw from taxable investment account is incorrect. It really depends. Also to assume yearly investment growth is 8% is overly optimistic. This does not reflect history.
I’m taking at 70. I ran the numbers. My money lasts way longer if I wait. I will retire at 65-67 but use investments for income until 70. It’s almost $1000 more a month if I wait. Then I don’t risk a bad market affect when I’m old. I’ll have a higher base income.
I don't quite understand the need to "wait" until 70. Sure, you'll get more money, but unless you have a very large 401K/IRA it's irrelevant. When you're 75 do you think you'll be traveling as much as when you were 65? Do you think you'll make it to 75? 85? And if you do make it to 85, will you be active and needing that much money?
My plan WAS to collect at age 70. My plan is NOW to begin at age 62. SS is only part of my retirement plan and it will do the most good for me growing in financial instruments paying greater than 9 percent.
Mom applied at 62 because she needed the additional income. She then lived to 83. So it worked out just fine. She also got a boost when her ex husband died.
Privatizing Social Security could actually be a good thing. Here’s why- as it currently stands, if you contribute for 40 years and then die before reaching retirement, your family/heirs receive nothing. With privatization, beneficiaries could be designated and your account passed to your heirs.
Also, people might not take SS at age 62 and take it at 67 or 70 because they don't want to die at age 62 and get 0 bucks. People like me don't have to worry about dying early and spending my 401k down and only getting like 2 years of SS money, if I delay to age 70 and die at age 72, if invested like HSA account, that SS money invested would go to the heirs
They’re already addressing the problem. Taxable SS income went up by 4.4% to 176,100.00 in 2025. Up from 168,600 in 2024. While COLA’s went up just 2.5% for 2025. Look for this trend to continue.
It might make sense to wait to 70 to take SS benefits if you expect your spouse to way out live you and take higher survivor benefits than their own SS benefits. Otherwise, probably not.
Your analysis is not complete. Having more in tax deferred vs taxable accounts will not change the math in your examples. Both had enough in the two account types to manage their taxes by withdrawing from a combination of both.
As Michael Kitces said, "Social Security is the best old age annuity on the planet." That is how I and many pros see it. I am single, have no other fixed income, and have no debt (or car as it isn't needed here). My goal is to spend every last penny. Social Security at 70 to my death will pay all my expenses, so the rest is gravy and, no more airports please as half my life has been spent in airports. Remember, the amounts on your SS statement are in today's dollars and will increase with COLAs every year you delay. Make sure you calculate your benefits yourself as SS has a history of overpayment, and then they come to collect the overpayment 10 years later (brutal).
Great analyses - the big assumption (and anyone can run their estimated SS benefit for themselves) on the use of funds at 62 vs 67 vs 70, either earning an average of 8% outside of SS compared to the higher values later on (5 or 8 years later). I calculated this comparison only yesterday, and in my own SSA projections there is NO scenario where later is better (all the way out to me living until 99). Of course YMMV, I next need to run some tax scenario calculations, RMDs really skew things (and Roth conversions are very likely in my future).
But if you work till you turn 70 then you shouldn’t have to take money out of your investments to live on until then. I still hope to work until I’m 70 or maybe a few more years after then I want to let my investments grow for a few years untouched to get more compounding growth.
They count as RMDs. Early cash flow is king especially with so many variables. These debates seldom consider a reasonable life expectancy or the benefit of passing deferred assets to heirs who may be in lower brackets (and their additional 10yr tax withdrawal window)
don't believe it. Options: take out claim on spouses SS if they have applied. You get 50% of what they do. If you can't live on pensions + partial then you shouldn't retire. I did this and learned to live well on Xspouses SSn then at 70 I applied for mine for me that Turned out to be a gold mine at 70 - I am talking an additional 17k a year and you guessed it it only gets better from their.
I think Social Security did a fair job of setting the benefits at various ages. That is why everyone can argue about it. I waited until 70 and feel that worked best for me. Your situation could be to apply at 62. I applied for Social Security online. It was no harder than opening an online account at Morgan Stanley. Enjoy those golden years and remember to trail brake in and fire it out to the exit!
Unrealistic scenarios, and odd withdrawal strategies. Social Security is effectively an annuity with a built in COLA and it should be treated that way. Put another way, what if they are are retiring in 1965 or 90's Japan.
I collected at full retirement age and still work. All my payments go tax free into my 401k. That way the funds are in my pocket so to speak and earning.
I don’t agree some of the assumptions you made. Live to 95? If you assume that then it’s imperative that you do ROTH conversions IMMEDIATELY cuz that’s another 30 years alive which allows the money to grow tax free. What about Medicare at 65 with the 2 year look back? For those 2 years you need to look poor from an income standpoint for the lower health premiums, I would load up on ROTH conversions from 59-62 so you have plenty of after tax money, I would protect the 500k brokerage account as that dividend income and long term cap gain is tax free. As your chart plainly shows the older you are the more tax you’re gonna pay, you Cali people sort of just assume that but in normal America we want as little as possible going to the government. I would wait til 70 to collect SSA plus a 1M of all after tax that I don’t have to pay a dime to Uncle Sam due to long term cap gains 120k in tax exemptions, SSA below the taxable threshold and occasional one time expenses coming from the tax free ROTH… Assuming I leave money to my heirs it’ll be tax free for them…
Sorry, not buying it. In the same way that you dollar cost average when investing, you lower market risk by dollar cost averaging when spending your nest egg. By delaying social security, you increase your "retirement paycheck." There is no guarantee that the stock market will increase by 8% but delaying will absolutely increase SS by 8% + cost of living increase. That increase compounds over time and also becomes the sole Social Security check for the surviving spouse. Delaying until 70 is the closest thing there is to a sure bet.
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I plan to take SS at 70. I am 7 years older than my wife, and have been the primary earner in the family. My plan is that when I am no longer alive, my wife will collect the higher survivor’s benefit for the rest of her life.
Yeah she will need to finance her new man😅
Also plan to take at 70, survival benefit is a factor. SS is the best annuity against inflation and longevity risk, can’t buy a comparable annuity these days. Also the problem with these financial analysts is it doesn’t fully take sequence of return risk into account.
@@PatDe-zj4et If she is smart it wont be a loser like you.
Work till 70 or close to it and you won't need to pull little or any. Plus, you can actually put more in. Then you get the best of both and more. None of these planners talk about most people waiting till 70 will still be working, or the spouse still works. Doing these things will bring you way ahead of this, and if you are older and the major earner your spouse will have more and the ability to leave more to your kids. You can also save significantly if one spouse has Healthcare through work.
I've always planned to claim Social Security at 70 to get the highest benefit, but with inflation and rising healthcare costs, I’m wondering if that's still the best strategy.
Many retirees are reevaluating. The problem is that delaying Social Security assumes you’ll live long enough to make up for the years you didn’t claim. Plus, what if the system changes, or your other savings don’t perform as expected?
Exactly! I claimed mine at 67 and used the extra income to invest strategically. By the time I was 70, my investments had grown significantly, giving me more flexibility. I think waiting until 70 isn’t a one-size-fits-all solution anymore
Thank you so much for the suggestion! I really needed it. I looked him up on Google and explored his website; he has an impressive background in investments. I've sent him an email, and I hope to hear back from him soon
I wish I’d known about someone like him earlier. My biggest regret is not reinvesting after my initial losses. I stayed in cash, and with inflation, I feel like I’ve lost even more
Scam thread! Please be aware!
I retired in 2016 at 62 and had to decide whether to take Social Security then or wait until 70. Waiting would have meant withdrawing the money from my S&P 500 fund over the last 8 years. I decided to take SS and watch my mutual fund grow, and grow, and grow. SS has deposited 96 checks into my account and my S&P mutual fund has almost tripled.
I waited to claim at 70 because:
- I was in good health
- Working enabled me to continued building wealth; rather than draining it
- working filled in some zeros in my earnings history
- We want to leave something to the children
- I wanted the higher SSA benefit
- The higher SSA benefit better protects us in a 'worst-case' financial scenario
- I expect to received the SSA benefit for 16 years; at which point it goes to my 7 year younger wife for an expected 10 more years
This was my decision.
It may or may not be right for us - time will tell.
My decision may not be right for you.
Agree with your reasoning as it applies to my experience. This guy forgets or fails to mention by waiting till 70 the benefit of providing a higher spousal benefit especially if the spouse’s benefit level is much lower. It’s a great legacy to leave as you mention.
Absolutely consider the longevity of a couple vs an individual.
How come Roth conversions weren’t considered? Deferring SS would allow more Roth conversions.
At age 62 I was physically able to greatly enjoy the SS money. At age 70 and beyond my health and energy greatly diminished. But I have this somewhat bigger pile of money to look at from my rocking chair.
@@Tryp-j9d My mistake was not choosing parents with better genes. That's according to the heart valve surgeon when I asked why my valve fell apart. No drugs, no alcohol, always exercised...
From someone who is still in their 50's.
If you lucky to be healthy at 70 with no terminal illness / disability / chronic pain etc…
Live Life
Nothing is granted
These scenarios also assume you have heirs you are trying to pass on a maximum amount of funds to. Most people are not going to live until age 95.
I'm curious why the withdrawals in the early years aren't taken from the 401k to minimize RMDs later.
Yes this guy is wrong! You will have higher RMD's, less SS money, and it will be 85% taxed due to a lower provisional income. Also, if married you might have screwed over your spouse since they will lose most of their possible SS survivor benefit.
@@_Coffee4Closers one early taker, one late taker when both had jobs
@@dacianbonta2840 If a married couple and one has a larger benefit at FRA, would agree.
@@dacianbonta2840Or in my case, I am widowed, so I am collecting on my late spouse’s account and then collect on mine at 70.
@timeelston4260: I strongly agree with you and was going to make a similar comment but you already took care of that…
The big thing you missed in this video is the fact that taxes on Social Security should be illegal in the first place. Double taxation is illegal and that is exactly what is happening. SS recipients have already paid taxes on the wages when they were working and now when retirees desperately need this income the most to live the government gives them the shaft! Retirement may become a problem for Americans
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
I completely agree; I am in my mid 40s, approaching retirement, and have approximately over 2million dollars in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, the Fin-advisor can only be neglected, not rejected. Just do your due diligence to identify a fiduciary one.
This is exactly how i wish to get my finances coordinated ahead of retirement. Can you recommend the financial advisor you used to get ahead?
I copied her whole name and pasted it into my browser; her website appeared immediately, and her qualifications are excellent; thank you for sharing.
@@sabastinenoahtrolls
Very good video. One item not covered is that 85% of SS income is the most taxed for federal purposes and zero in many states, so compared to other income such as IRA withdrawals, having more SS income is beneficial (making deferring to 70 maximizing the payment and COLA). For me SS will be taxed at 20% vs 30% for other income (combined fed and state).
I am glad Jerry and Elaine are doing well. They probably will live a long time. Now we need to see one for George and Kramer with only 500,000 saved up for retirement and $2000/ month at 67. What if you keep working until 70? These computer generated returns are quite complex but adding real estate and capitol gains into the mix. Or change in spending. How about gifting to children or charities can you afford it. Thanks very much.
And then there is Newman with his postal pension…
Factoring combined life expectancy for a couple increases the utility of delaying SS enough for me. It also allows room for things like Roth conversions that minimizes the RMDs.
I took social security at 64. Glad I did.
I am 66.6. If I wait 3.5 years, I will draw $900. more a month. This is like having an additional $270k in the bank with a yield of 4% yield. I would feel like an ignominous fool if I lived to 70 and left $900 on the table.[Also wife is 12 years younger than I.]
This is pretty much the same situation that I'm in.
COLAs are great..... but that near 8% increase every year, along with any COLA...IS a very good raise.
But, I doubt that I can last more than two years.... (68 1/2) I know my wife is pushing me to start before that.
MY health may not allow me to make it to my early 70s, too.
Plenty of things to think about.
I could use the extra money!
BTW..... I don't get 8% increase every year that I wait.
My math shows only around a 7% increase each year, to age 70.
No, it is not. Because when you die, or you wife, which could even be after you have collected three checks or even none, you will have nothing of that phantom $270k. You are confusing an annuity instrument, like SS, with the yield from an actual investment.
@scooter5940 Not confusing anything. Without the funds in the bank you don't get the yield. The present value of taking social security now will be expended on new house projects. Better to use the time to discipline.
@@Calventius an annuity from the government is not comparable to the yield from an investment.
@scooter5940 I think it is better because of the COLA and it is backed by the United States, not like an investment which can dissappear
This is good work. The two main uncertainties (assumptions) that impact the decision are return on investments and inflation rate. You did not show different inflation rates. (I believe higher inflation assumptions help the wait-to-collect scenario). Cheers.
If you take the money out of the traditional IRA or 401k first, the RMDs will be lower and taxes are easier to control. This recommendation to take it out of the taxable account first is wrong in this scenario.
In my case each year I work past 67 my benefits go up more than 8% because they pool the funds from your 35 best years. I am adding $109,000 a year to the pool (growing 3 to 4% a year from raises) and the income they are dropping from the 35th worst year adjusted for inflation is 40K to 50K. So my benefits are rising about 10.2% a year from 67 to 70.
My brother and sister in law delayed until 70. They got about the same amount from working. My brother died a year later. What a shame he did not take at 66 and did not enjoy his life a bit more instead of working until 70. Although he had plenty of savings, he was afraid to spend it.
My husband and I took ours at 65. Like him, we have a good amount of savings. It is easier to spend “money coming in” even if it could have made more. We know our savings will go to our kids if we should pass early. Our 8% SS increase will not.
This is misleading. It is entirely dependent on assumptions. Yes, if you could guarantee a 8.5% return on the 401k you’d be better off taking SS early. But you might get a 5% return, in which case taking SS at 70 would be best. Taking SS at 70 offers insurance against the real risk that 401k returns will be low.
SS is also likely your only inflation adjusted asset that is also guaranteed
no free lunch
insurance (against longevity in this situ, by delaying SS) is supposed to COST money
you could post pone taking ss and try to live off your 401 and suddenly the market crashes and your selling shares that are worth less, where as if you took SS early you'll forestall starting pulling from your 401 (or at least less from the accounts) and in a down market you won't be selling as much at a loss. Plus if you take ss early regardless of the market , that leaves more in your 401 to leave as a legacy if you desire doing that.
@@markbajek2541 you cash in your insurance policy (SS) when the catastrophe happens (e.g. market crash) not before.
Until such contingency, the wise diligently pays the insurance premiums (by 401k withdrawals).
when market rebounds you can reinstate the revenue insurance of SS through suspension/withdrawal of bennies
@@markbajek2541 Not if you use a bucket strategy where you minimize risk. I was going to take SS at 62. Stopped working for someone else at 55. After 7 years of withdrawing from my IRA I had more money than I had at 55. I decided to wait till 66 set up a 4 year cash bucket. Rinse and repeat till 70. My SS benefit went from 1750 at 62 to 4020 at 70.
Don't forget the word 'security' in your thinking.
Having guaranteed income that is inflation adjusted and not dependent on market fluctuations later in your life is a great benefit.
Of course they both should have done a Roth ladder. But you miss the main value of SS. It is insurance, in case everything else gets wiped out or over spent and you then live to 100. It is the best and cheapest insurance there is and everyone should PLAN to take it at 70. This will also give you a bigger roth conversion window. And better help a spouse. If you die at age 70, it was still insurance you paid for with the delay.
I know that you're focused on Social Security here, but it would be interesting to consider the impact of siphoning money out of the 401K into a ROTH fund in the period between 67 and 70 years old in order to try to avoid some of the tax hit on Social Security Income (deferring SSI til age 70).
I retired at 61 1/2 and started collecting at 62. I'm 71 1/2 now. I friend of mine, who worked with me, wanted to wait until 70. He died at 69 and five months. Still on the job.
Anecdotes are not evidence. Statistics say that waiting is the best option. Your friend died and so he didn’t need the money anymore.
I appreciate your knowledge but when I retire all I will have left will be ss which should be at $3500 at 70. Also, maybe it’s me but at 80 how is somebody going to spend $100,000 unless they are traveling or gambling.
The factors that have the greatest impact on terminal worth are also the factors with the greatest uncertainty: how your portfolio will perform until your death, and how long you will live. These examples are fine for illustration purposes but the difference in results were minor compared with the differences yielded by the portfolio performance variable.
Just as long as one is healthy and fit, it pays to delay SS as long as possible not unless one cannot afford to wait financially.
My plan is start my benefit at age 62. Since I was married more than ten years and won’t remarry until after age 60, I am eligible to stop my benefit and draw 100% survivor benefits if my espouse dies before me (as long as I am age 67 or higher). Since my ex will have a much larger amount; there is no reason for me to wait until age 70 to max my benefit (unless I think he will live a super long time).
If you’re 65 and in good health. A man will live until about 83 while a woman reaches 87. With many living well beyond those projections. If you spend retirement drinking Guinness and smoking Newports then you won’t make it that long. You have far more control over not only your longevity but your quality of life than you think.
Hahahaha!!!!’
No one knows how long they will live. If one does not make it to age 70, all those years one put into the system is a total waste.
That goes for a lot of things. A 401k is bad if you die before you retire
That being said I plan to live a long time and save heavily and I am going to wait for 70 for Social Security (but not to retire).
@johngill2853 At least a 401K can go to your your beneficiaries not your social security 🤷🏽♀️
@@Brigitte724 Don't mistake strategy with outcome
I will delay Social security until 70 because that is the best strategy for me. If I die early I won't care because I'll be dead
@@johngill2853& if you have a spouse, they may be able to draw a higher amount
@@Brigitte724your social security can go to your spouse.
However, if Jerry loves his gig and worked until 70, the sum in his retirement account is going to grow instead of drop. Also, he is contributing all savings into Roth. It’s just another scenario.
Don't know if I'm just being wrongheaded here, but $133K difference based on estimates that occur over 35 years, or more, seems to be insignificant.
Either way, "he has won the game" of Financial Independence.
Why take anything from the taxable account?
Because you need the money.
Withdraw first from Tax Deferred accounts for tax purposes and to reduce the blows later when RMDs kick in at 73.
Good video but may I suggest a more conservative 4% to 5% growth on investments as retirement often means moving some assets to lower risk investments. One way to do that is simply drawing down your IRA and delaying SS and keeping investment mix the same which over time will be on a lower balance thus effectively reducing risk. The larger SS with COLA becomes your risk free portion of your portfolio. Other benefits include a larger survivor benefit for spouse, more income in later years in tax preferred assets (at most 85% of SS is taxable federally and zero in many states). Delaying also provides inflation protection via a larger COLA and the earlier IRA withdrawals may allow for Roth conversions to provide more tax free to heirs. As for the taxable brokerage, by not drawing that down it can also go to heirs with a step up in basis and you can harvest losses during your lifetime
Married senario makes SS is a life insurance policy in case you or your spouse lives longer than average. Spend down Pretax money, Especially in Jerry's case. Convert to Roth at the top of your bracket. Do NOT spend down after tax..These are taxed at a lower rate. You will then leave more tax free to your heirs in the future as Taxes will likely increase. Thank you.
Yes. I plan on delaying to 70 to maximize the survivor benefit but have my spouse claim earlier. That will give me 8 years to live off my IRA and lower the future RMDs. Each person has their own unique situation.
It may make financial sense to spend taxable first and convert more of the pretax to Roth.
Yes if you need a Roth. I already have more tax free or high basis assets than I will ever touch, primarily life insurance and municipal bonds. I prefer my brokerage account over a Roth. It allows me to invest in assets that cause issues when held within an IRA, primarily MLPs. I also do not sell my stocks other than to harvest losses which you cannot do with an Roth and my heirs will get a step up in basis and can continue to hold the assets as invested without a need to withdraw them in 10 years.
@@Bondbeer Good point on MLPs in IRAs.. I had large gains on 3 out of 5. I got rid of all. Laws changed. Not worth the hassle
@@Bondbeeryou are referring to the 62/70 where the lower income (normally lady, younger, stayed home to raise the kids for a paid of time) takes at 62 age the hight wage rather defers so when he passes, the lady gets the highest SS for the remainder of her life.
It gets much more complicated when planning for a spouse.
How does it work that those in private employment get to determine when they stop working
I have very modest savings and very modest expenses. Social security would cover all of my current expenses with a little left over at 70. It would cover most of my expenses, not my $176 a month car payment, at 67/68. I can also move from where I currently rent and cut $700-800 a month. The safety of the payments at 67 or later just can't be ignored. The thought of break even and leaving a huge sum of money for somebody else to enjoy is not a remote concern. I'm completely alone so no need for a legacy.
Taking SS at 68 instead of 70, I mathematically calculated that the break-even point would be 83 years of age for me. Therefore, I took mine at 68!
One thing that I never hear anyone discuss is, chances are both Jerry and Elaine will continue working until 70. That aside, why couldn't Jerry start pulling from his 401K first?
I’m waiting until 70 so that my spouse can collect more when I die.
And if God wants you at 69?
3 years that you weren't collecting? Try 8 years that you weren't collecting.
Good point
SS would be reduced or eliminated in those years before FRA, if they were working depending on income. Hence three years
My retirement plan has always been simple. Do I have $100k/yr in base “savings” to last me till the day I die if I never earn a nickel in interest, dividends or gains. The answer is yes do I’m not concerned.
IF YOU CAN...wait til 70!!! if you can't, then take it when you need it. simple as that 🙂Most people (like me) are still working past 62, 65....so takiing SSN is a BAD idea.
I get the overall point of the video but it seems overly simplified, e.g. wouldn't the cost basis of the taxable accounts be a significant factor?
If SS is a meaningful part of your retirement, don't hesitate to take it early. SS bennies are bound to be cut. Plus, if you don't need the money, you can invest it. And remember, for every year you delay, your life expectancy also decreases. Govt bean counters have run the calcs - statistically, the Average Person will get the same amount of bennies if they retire early vs delaying SS to 70. You simply never know how long you'll live.
What if you take SS at 67 but invest it in a tax deferred account, while continuing to work until age 70?
Investing should include some type of conservative fixed return component. If you don't need SS, why not make that part of that savings plan.
Isn't the obvious answer to this, is to spend down (withdrawal, at least) the 401K before age 72? RMDs will be much smaller with the combination of a greater SS benefit.
In some circumstances, perhaps. Main problem I see with that is that you've completely forgone the tax deferral provided by the 401k by distributing the money early. If you're reinvesting it in a taxable account you'll be paying tax on every penny of interest, dividends and realized gains every year. Usually there's some happy medium in between leaving everything in the 401k and taking everything out by the time you're 72.
Roth conversions till 70 for me. SS will be able to cover over half of my expenses if I wait.
Not a mistake depending on what your purposes are. My parents lived to be 90+ really don't care about making a few dollars more at 80
I started collecting Social Security disability at 37. Social Security administration is so dysfunctional. It is embarrassing.😊
It sure sounds like it worked well for you. I am 69 and haven't collected a dime.
I don't get how taking more money out of a taxable 401K later while taking SS earlier would ever lead to lower taxes.... HOW? he will have a much lower "provisional " income due to a smaller SS Check, and he will be needing more than the amount that will trigger 85% of his SS to be taxed plus the taxes from the other money sources. I don't see it. He will be hit with higher RMD's due to keeping the 401K money in the account later in life, plus have 85% of SS taxed, and the SS amount will be smaller.
Look at it this way You could have a 73 year old couple with $60,000 in SS and have to take out a RMD of $20,000 this year and still no Federal tax.
@@Satjr35031 So this couple is taking SS at 62 and getting $2500 per month x2.... yeah sure, that is basically impossible. the Average benefit at FRA of 67 is currently $1800, and taking it at 62 would be reduced by over 30%... so explain how many people you think could possibly have a benefit that big at 62? We are talking about most people here a not a couple that both people that made $160000 per year maxing out their lifetime benefit.
Agreed!
We live in California (they do not tax SS benefits): Our combined SS income is projected to be about $90,000 (once we are both receiving benefits) along with $20,000 from RMDs from IRAs; our combined taxes are projected to be $1560 and $100 totaling $1660 (Federal and State). Our effective tax rate will be 1.5 % on $110,000 income!
So if you had the same $110,000 pre-tax income but split with $50,000 SS and $60,000 RMDs and/or withdrawals from IRAs, your tax would be $8,263 and $858 (Federal and State) totaling $9,121 or an 8.3% effective tax rate or $7,461 MORE in taxes on the exact same income. That is how provisional income works, the more income you have from SS vs IRAs the lower you are taxed.
I will start my SS next year at 70, my wife will start hers between 64-66 (haven't decided yet) she's 6 years younger. We are taking advantage of the 8 years from when I turned 62 and 70 by chipping away at our IRAs with Roth Conversions and withdrawals for our wants and needs. Thus, reducing our RMDs when turning 73 and 75 ( wife was born after 1960).
What about capital gains in the taxable account?
Jerry’s doing pretty well with that much savings…. He doesn’t even need SS.
There are too many variables to derive an optimum plan. I was originally planning to wait until 70 to collect SS with the intent of leaving my younger wife with a higher SS check when I'm gone. Also, if one does not distribute their 401K/IRA early on and waits for RMD's, they lose the Roth conversion option on the RMD amount. It seems to me there are a few guidelines to follow and that is about as good as anyone will get to optimizing their retirement plan. 1. get your money out of your IRA and distributed into a Roth as soon as possible with the least tax consequence and avoid high RMD's. 2. Take your SS at FRA. 3. Stay at least 50/50 with your stock/bond allocation. 4. Try not to pass taxable assets to your kids. 5. Prey that Trump keeps his word about eliminating tax on SS.
I go the safe route beyond traditional IRAs by setting up 2 year CDs pulled from my taxable accounts. Conservatively, you can’t go wrong.
I'm over 60, but even at the age of 30, I KNEW social security would never be there for me. This is not a new development.
lol. Except here you are and SS is still here as well.
But what if you work until you take social security.
I am interested to know how a pension would affect this scenario. I am forced to contribute to SS
AND my teacher pension. They both have a cost of living adjustment. How will this affect my taxes when I start receiving both benefits? My state includes SS and pensions in earned income.
You must be in CA!
@@kittykat334 MN
@@kittykat334 Minnesota
I’ve been watching a lot of these videos…..62 or 65, 67, 70? It basically doubles waiting until 70.
No one spends much, if any, time on health insurance. So far I can only guess the suggestion would be to get a Medicare advantage plan if filing at 62.
A few assumptions you made may not be appropriate. If someone delays claiming SS until 70, and keeps being employed, he will not draw down his taxable investment account, and the SS will not push him to a higher tax bracket. If someone is not work, does not have other income and want to delay SS claim until 70, he should withdraw from 401K first, so tax rate is lower. The statement that always withdraw from taxable investment account is incorrect. It really depends. Also to assume yearly investment growth is 8% is overly optimistic. This does not reflect history.
I’m taking at 70. I ran the numbers. My money lasts way longer if I wait. I will retire at 65-67 but use investments for income until 70. It’s almost $1000 more a month if I wait. Then I don’t risk a bad market affect when I’m old. I’ll have a higher base income.
But what if you work until age 70?
I don't quite understand the need to "wait" until 70. Sure, you'll get more money, but unless you have a very large 401K/IRA it's irrelevant. When you're 75 do you think you'll be traveling as much as when you were 65? Do you think you'll make it to 75? 85? And if you do make it to 85, will you be active and needing that much money?
My plan WAS to collect at age 70. My plan is NOW to begin at age 62. SS is only part of my retirement plan and it will do the most good for me growing in financial instruments paying greater than 9 percent.
If you don't need it, collect it and invest it. That guarantees you get it.
Mom applied at 62 because she needed the additional income. She then lived to 83. So it worked out just fine. She also got a boost when her ex husband died.
He wants you to take SS earlier to keep AUM high to collect fees.
Having so much deferred tax accumulation is ludicrous IMO. And the analysis doesn’t factor in sequence of return risk.
I don't anticipate SS being cut. I think something will be figured out. I just hope it isn't turning it over to Wall St.
I'm 100 percent in US Stocks and will be rewarded handsomely, if SS is investing in the stock market like HSA accounts 😁
Privatizing Social Security could actually be a good thing. Here’s why- as it currently stands, if you contribute for 40 years and then die before reaching retirement, your family/heirs receive nothing. With privatization, beneficiaries could be designated and your account passed to your heirs.
Also, people might not take SS at age 62 and take it at 67 or 70 because they don't want to die at age 62 and get 0 bucks. People like me don't have to worry about dying early and spending my 401k down and only getting like 2 years of SS money, if I delay to age 70 and die at age 72, if invested like HSA account, that SS money invested would go to the heirs
My dad paid into SS for 35 years, retired at 55 and died before ever collecting a dime.
They’re already addressing the problem. Taxable SS income went up by 4.4% to 176,100.00 in 2025. Up from 168,600 in 2024. While COLA’s went up just 2.5% for 2025. Look for this trend to continue.
If you live to age 70 the odds of making it your crossover point (79) are pretty high.
Jerry is a billionaire, Elaine is the daughter of a billionaire.
And yet, the wisdom of the "Herd" is to retire and draw social security at age 62, and put any excess into Nvidia.
It might make sense to wait to 70 to take SS benefits if you expect your spouse to way out live you and take higher survivor benefits than their own SS benefits. Otherwise, probably not.
Your analysis is not complete. Having more in tax deferred vs taxable accounts will not change the math in your examples. Both had enough in the two account types to manage their taxes by withdrawing from a combination of both.
As Michael Kitces said, "Social Security is the best old age annuity on the planet." That is how I and many pros see it. I am single, have no other fixed income, and have no debt (or car as it isn't needed here). My goal is to spend every last penny. Social Security at 70 to my death will pay all my expenses, so the rest is gravy and, no more airports please as half my life has been spent in airports. Remember, the amounts on your SS statement are in today's dollars and will increase with COLAs every year you delay. Make sure you calculate your benefits yourself as SS has a history of overpayment, and then they come to collect the overpayment 10 years later (brutal).
Great analyses - the big assumption (and anyone can run their estimated SS benefit for themselves) on the use of funds at 62 vs 67 vs 70, either earning an average of 8% outside of SS compared to the higher values later on (5 or 8 years later).
I calculated this comparison only yesterday, and in my own SSA projections there is NO scenario where later is better (all the way out to me living until 99).
Of course YMMV, I next need to run some tax scenario calculations, RMDs really skew things (and Roth conversions are very likely in my future).
You’re getting the same amount of return no matter when you take it just get it asap
But if you work till you turn 70 then you shouldn’t have to take money out of your investments to live on until then. I still hope to work until I’m 70 or maybe a few more years after then I want to let my investments grow for a few years untouched to get more compounding growth.
Everyone has different needs and expectations so there is no correct ageto take ss
Instead of giving your money to Uncle Sam, consider setting up a qualified charity distribution from your retirement accts straight to the charity(s)!
They count as RMDs. Early cash flow is king especially with so many variables. These debates seldom consider a reasonable life expectancy or the benefit of passing deferred assets to heirs who may be in lower brackets (and their additional 10yr tax withdrawal window)
Very soon 70 will be the age when you can start taking "benifits". Getting SS "early" will be a thing of the past.
It should be 10% and not 8% because you do get past COLA accrued, but you won't get (accumulated) COLA paid throughout each year.😅
I get a cost of living of $10.50 a month so if you get a double that means I get $21 a month
Break even point is octogenarian when you can start living lol. 62 or 59.5 case closed
don't believe it. Options: take out claim on spouses SS if they have applied. You get 50% of what they do. If you can't live on pensions + partial then you shouldn't retire. I did this and learned to live well on Xspouses SSn then at 70 I applied for mine for me that Turned out to be a gold mine at 70 - I am talking an additional 17k a year and you guessed it it only gets better from their.
I think Social Security did a fair job of setting the benefits at various ages. That is why everyone can argue about it. I waited until 70 and feel that worked best for me. Your situation could be to apply at 62. I applied for Social Security online. It was no harder than opening an online account at Morgan Stanley. Enjoy those golden years and remember to trail brake in and fire it out to the exit!
Unrealistic scenarios, and odd withdrawal strategies. Social Security is effectively an annuity with a built in COLA and it should be treated that way. Put another way, what if they are are retiring in 1965 or 90's Japan.
Don't forget sunscreen 😊
Will Trump move SS up to 64 years of age? Medicare 67?
I collected at full retirement age and still work. All my payments go tax free into my 401k. That way the funds are in my pocket so to speak and earning.
I don’t agree some of the assumptions you made. Live to 95? If you assume that then it’s imperative that you do ROTH conversions IMMEDIATELY cuz that’s another 30 years alive which allows the money to grow tax free. What about Medicare at 65 with the 2 year look back? For those 2 years you need to look poor from an income standpoint for the lower health premiums, I would load up on ROTH conversions from 59-62 so you have plenty of after tax money, I would protect the 500k brokerage account as that dividend income and long term cap gain is tax free. As your chart plainly shows the older you are the more tax you’re gonna pay, you Cali people sort of just assume that but in normal America we want as little as possible going to the government. I would wait til 70 to collect SSA plus a 1M of all after tax that I don’t have to pay a dime to Uncle Sam due to long term cap gains 120k in tax exemptions, SSA below the taxable threshold and occasional one time expenses coming from the tax free ROTH… Assuming I leave money to my heirs it’ll be tax free for them…
The break even is closer to 90 vs mid 80’s if you are getting a conservative 4 to 5% on your investments.
correct 4% 85 ,5% 95, and 6% around 110 yrs old, at 8% you may choose not to die
The SS program is going to be reduced, then significantly reduced, then will go away all together. Plan accordingly.
62 or you’re a chump.
Double your retirement money like I did! Just fold your cash in half!!!😂
Sorry, not buying it. In the same way that you dollar cost average when investing, you lower market risk by dollar cost averaging when spending your nest egg. By delaying social security, you increase your "retirement paycheck." There is no guarantee that the stock market will increase by 8% but delaying will absolutely increase SS by 8% + cost of living increase. That increase compounds over time and also becomes the sole Social Security check for the surviving spouse. Delaying until 70 is the closest thing there is to a sure bet.
One item overlooked is that you have to pay for Medicare if you don’t have other coverage. That is money out of pocket.