Basic Training #2 – 5.11.18
Decision time! I turn 62 in August and will become eligible for an ‘early’ social security benefit. Early brings with it an ~30% haircut in my ‘full’ benefit.
I’ve read many articles with convincing arguments to defer receipt until full retirement (66) given early receipt of benefits brings a lifetime of lower payments. Though never mentioned is that I eliminate the need to tap into my retirement account to cover living expenses!
I reference a certain client who claimed early, kept their IRA intact, and grew their account ~$100k more as a result. These ‘surplus’ funds can now supplement the reduced benefit as needed, while bringing more control over timing and taxation of retirement income through their late 80’s.
Everyone’s breakeven is different as are risk tolerance, personal circumstances, and life expectancy. Low yield, long lived investors would certainly be better off waiting. The possibility of future ‘means testing,’ benefit reduction for high income/net worth individuals is a concern as well.
Take 10 minutes and obtain your benefit estimate online (see link below) and we will be happy to plug your numbers and assumptions into our spreadsheet to personalize your choice.
FYI: ~50% of social security recipients opt for early payment. ‘The time is now’ it seems…for many.
Use this link to get your own social security page:
Quote of the Week:
Retirement is like a long vacation in Las Vegas. The goal is to enjoy it the fullest, but not so fully that you run out of money.