Nuanced Benefit of delaying claiming of SSA Benefits

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
cresive
Posts: 358
Joined: Sat Nov 26, 2016 12:12 pm
Location: Virginia, USA
Contact:

Nuanced Benefit of delaying claiming of SSA Benefits

Post by cresive » Sun Jul 14, 2019 12:21 pm

Proviso: This is a mental exercise where I am comparing two options on claiming SSA Benefits. Please don’t fill my reply box with observations of what I should really be focusing on. I am going through everything in my time. Right now, I am focusing on this specific issue. The information below will lead to the question, “How do you value a “guaranteed” benefit?”

I am looking at SSA benefit claiming strategies where I plan to work until my FRA, which is 67 y.o. On the day I retire, I can either claim SSA benefits and live my life, or delay SSA until age 70. In the latter scenario, I will live off my retirement savings which will be sufficient to fund my lifestyle either way (that is my IRA will be large enough to fund my retirement either way). I am doing this exercise as a way to optimize my plans. Currently, my estimated benefits are approximately $33,000/year at age 67 or approximately $42,000 (a gain of $9,000/year in income).
Let’s compare, as closely as I can, apples to apples. If I delay Claiming SSA benefits, I will gain 8%/year for three years on my SSA “assets.” I will also reduce my RMDs after age 70 (current law) by spending down my assets. Thus, delaying claiming will provide a net gain of (8%-portfolio returns)/year + reduced tax burden after 70. So, if I was lucky enough to get a 6% annual return on my portfolio during this period, I will still make 2%/year plus reduced RMDs delaying SSA benefits.

Here is where my question comes in. How do you correctly value the guaranteed extra $9000/year? A good rule of thumb would be value = income/0.04%, or a net gain of $220,000 ($9,000/.04 = $220,000). Therefore, if I spend less than $220,000 to fund my retirement between age 67 and 70, then technically, I have come out ahead. Even if I factor in how my investments would have done during that period, I still come out ahead.
However, since the SSA benefits are “guaranteed,” I need a higher valuation for delaying claiming benefits. To guarantee an income of $9,000/year in a 2008-like market, I would need to have more money saved than $220,00 (which would be reduced to $162,800 which would provide only $6,500/year in income). Using an idea from a post I read a couple years ago, you would have to have a portfolio valued closer to $315,000 to provide “guaranteed” income of $9,000. The higher value would guarantee a $9,000 income even in a worst-case scenario—i.e. stocks losing 50% value plus bonds losing 10% value. I have only included the initial year of a bad market. If the market takes three years to restore pre-correction value the effect is even more severe.

If you look at the value of delaying your SSA benefits with the higher valuation, it really makes little sense to not delay claiming SSA benefits, if you can afford it. You also have to increase any valuation of a guaranteed source of income. Using the 4% rule is fine if you are valuing a variable income source. However, a guaranteed income source should be valued much higher to compare “apples to apples.”

Big Dog
Posts: 1621
Joined: Mon Sep 07, 2015 4:12 pm

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by Big Dog » Sun Jul 14, 2019 12:30 pm

Mike Piper, publisher of OpenSocialSecurity.com, has a paper on this, which is well worth reading.

https://obliviousinvestor.com/claiming- ... we-assume/

orlandoman
Posts: 492
Joined: Tue Oct 19, 2010 7:27 am

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by orlandoman » Sun Jul 14, 2019 1:24 pm

cresive wrote:
Sun Jul 14, 2019 12:21 pm
However, since the SSA benefits are “guaranteed,”

The SS Trustee's 2019 Report says benefits are to be reduced by approximately 25% after 2035 ... did you factor that in to your calculations?

You may want to look at the the SS Trustee's 2019 Report https://www.ssa.gov/oact/TRSUM/index.html ...

Social Security’s total cost is projected to exceed its total income (including interest) in 2020 for the first time since 1982, and to remain higher throughout the remainder of the projection period. Social Security’s cost will be financed with a combination of non-interest income, interest income, and net redemptions of trust fund asset reserves from the General Fund of the Treasury until 2035 when the OASDI reserves will become depleted. Thereafter, scheduled tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2093.
"Don't Believe Everything You Think"

surfstar
Posts: 1886
Joined: Fri Sep 13, 2013 12:17 pm
Location: Santa Barbara, CA

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by surfstar » Sun Jul 14, 2019 1:37 pm

What if at age 67, the market drops and instead of delaying SS, you take it immediately in order to use less of your portfolio which recently took a hit?
You've now been able to sell less of your portfolio at a lower price, while allowing it to hopefully rebound.

Does this possibility of dealing with sequence of returns risk come out ahead mathematically? Lots of variables to try to model, unfortunately.

User avatar
David Jay
Posts: 7501
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by David Jay » Sun Jul 14, 2019 2:31 pm

cresive wrote:
Sun Jul 14, 2019 12:21 pm
How do you correctly value the guaranteed extra $9000/year?
I value my SS benefits by comparing what the equivalent income would cost in a SPIA (single premium immediate annuity). You can get a quick quote at immediateannuities.com

In your case, I would see what it costs for a 70 year old (man/woman) to get $9000 per year with an SPIA.

The $9000 is also inflation-protected, so I just selected a 2% annual escalator. That is a bit conservative because higher inflation rates would be covered with SS, but it gives me a quick-and-dirty number for comparison.

[edit] Because if the “fat tail”, perhaps a 3% escalator is a better “fit” to the possible outcomes. Even though inflation has been closer to 2% for a couple of decades (I can remember one year of 21% in the late 70s).
Last edited by David Jay on Mon Jul 15, 2019 8:23 am, edited 1 time in total.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

User avatar
jeffyscott
Posts: 8422
Joined: Tue Feb 27, 2007 9:12 am
Location: Wisconsin

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by jeffyscott » Sun Jul 14, 2019 4:17 pm

You don't gain 8% on your SS "assets", unless you believe delaying SS increases life expectancy.

The increase of ~8%, is more like a 5% increase in PV of SS benefits, IIRC.
Time is your friend; impulse is your enemy. - John C. Bogle

User avatar
House Blend
Posts: 4646
Joined: Fri May 04, 2007 1:02 pm

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by House Blend » Mon Jul 15, 2019 9:09 am

Let's say that today is January 1, 2019. It is also your retirement date and 67th birthday. I'd look at it this way:

A. If I claim now, I get $33000 2019 dollars in 2019 and beyond.
B. If I claim later, I get $42000 2019 dollars starting in 2022.

My expenses will be higher than either of these figures, so I want to compare how much it will cost me to cover $42000 in 2019 dollars starting from now.

Under A, I need to buy an inflation indexed SPIA that pays $9000/year.

Under B, I need to have $42K 2019 dollars in 2019, 2020, and 2021.

For a period this short, I'd be looking at CDs or treasuries to cover years 2 and 3, whatever pays more. Let's say you can find 1 and 2 year CDs @ 3%/yr and inflation is 2%/year. (For longer delays, you might want to look at TIPS for the later years.)

That means you'd spend

42000 * (1 + (1.02/1.03) + (1.02/1.03)^2) ~= $124,800

to cover the income gap between age 67 and 70 benefits.

So under B, you are in effect getting a $9K/year inflation adjusted SPIA for a price of $124,800. That's a payout rate of 7.2%. Good luck finding that in the retail market.

If you want to work it out to 6 decimal places, you should also take taxes into account and the fact that SS income is taxed at a lower rate (and is often free of state tax), and that both SS and non-SS income can (depending on the ranges involved) increase how much of your SS benefit is taxable.

User avatar
firebirdparts
Posts: 492
Joined: Thu Jun 13, 2019 4:21 pm

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by firebirdparts » Mon Jul 15, 2019 10:15 am

Analysis of cash flows is very simple, really. You bring them back to their present value using the time value of money. What is maybe difficult in real life is assigning a cost of capital in real life. COLA's add a slight complexity in this. In your case you have another complicating factor of having to guess what happens to your investments during those 3 years, and, for sake of completeness, maybe forever.

Ignoring the complications, the simpler question is which one is "more money" and the math is easy.

If somebody pays me $1 10 years from now, and I say the cost of capital is 5% per year, then I would consider that dollar today to be worth $1/(1.05^10) which is 61 cents. I intend this as an example. You decide what the cost of capital is to you.

it is not proper to think you are earning 8% on your SS "asset" because it's actually a series of payments that is becoming 3 years shorter, and in addition to that, the money is in the future, and we don't value money in the future the same as we value money today.
A fool and your money are soon partners

User avatar
David Jay
Posts: 7501
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by David Jay » Mon Jul 15, 2019 11:11 am

House Blend wrote:
Mon Jul 15, 2019 9:09 am
So under B, you are in effect getting a $9K/year inflation adjusted SPIA for a price of $124,800.
I just checked at Fidelity, with a 2% escalator (the only escalator that they offer in their online calculator), a $750/mo SPIA for a 70 year old male is $206,000.

So even with just a 2% escalator, deferring SS wins by about $80,000.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

User avatar
jeffyscott
Posts: 8422
Joined: Tue Feb 27, 2007 9:12 am
Location: Wisconsin

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by jeffyscott » Mon Jul 15, 2019 12:04 pm

firebirdparts wrote:
Mon Jul 15, 2019 10:15 am
Analysis of cash flows is very simple, really. You bring them back to their present value using the time value of money. What is maybe difficult in real life is assigning a cost of capital in real life. COLA's add a slight complexity in this.
I thought it was called a discount rate, but in any case, would you not just use a real, rather than nominal, value for that cost of capital or discount rate? Then you could find the rate that results in the two choices being equal and decide how you feel about that return for delay. With FRA of 67 and using life expectancy of about 17 years at 67 based on SS tables, it would be something like:

$X starting at 67 for 17 years vs. $1.24X for 14 years starting at 70. Then convert each annuity to a PV at age 67 and maybe find the real rate that makes them equal. Or if this is the higher benefit between two spouses, then the term would be longer, based on joint life expectancy.
Time is your friend; impulse is your enemy. - John C. Bogle

Topic Author
cresive
Posts: 358
Joined: Sat Nov 26, 2016 12:12 pm
Location: Virginia, USA
Contact:

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by cresive » Mon Jul 15, 2019 2:57 pm

Big Dog wrote:
Sun Jul 14, 2019 12:30 pm
Mike Piper, publisher of OpenSocialSecurity.com, has a paper on this, which is well worth reading.

https://obliviousinvestor.com/claiming- ... we-assume/
thank you!

Topic Author
cresive
Posts: 358
Joined: Sat Nov 26, 2016 12:12 pm
Location: Virginia, USA
Contact:

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by cresive » Mon Jul 15, 2019 2:58 pm

orlandoman wrote:
Sun Jul 14, 2019 1:24 pm
cresive wrote:
Sun Jul 14, 2019 12:21 pm
However, since the SSA benefits are “guaranteed,”

The SS Trustee's 2019 Report says benefits are to be reduced by approximately 25% after 2035 ... did you factor that in to your calculations?

You may want to look at the the SS Trustee's 2019 Report https://www.ssa.gov/oact/TRSUM/index.html ...

Social Security’s total cost is projected to exceed its total income (including interest) in 2020 for the first time since 1982, and to remain higher throughout the remainder of the projection period. Social Security’s cost will be financed with a combination of non-interest income, interest income, and net redemptions of trust fund asset reserves from the General Fund of the Treasury until 2035 when the OASDI reserves will become depleted. Thereafter, scheduled tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2093.

Good points. thanks for pointing this out

Topic Author
cresive
Posts: 358
Joined: Sat Nov 26, 2016 12:12 pm
Location: Virginia, USA
Contact:

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by cresive » Mon Jul 15, 2019 3:01 pm

surfstar wrote:
Sun Jul 14, 2019 1:37 pm
What if at age 67, the market drops and instead of delaying SS, you take it immediately in order to use less of your portfolio which recently took a hit?
You've now been able to sell less of your portfolio at a lower price, while allowing it to hopefully rebound.

Does this possibility of dealing with sequence of returns risk come out ahead mathematically? Lots of variables to try to model, unfortunately.
Very Good point. I didn't include this idea due to not wanting to dilute my main point. However, I would have cash equivalents for the three years between 67 and and 70 so as to not suffer from sequence of returns risk. The nice out is also claiming SSA benefits after a year still increases your benefit by 8% so even if returns are catastrophic, you have the option of taking SSA benefits

Topic Author
cresive
Posts: 358
Joined: Sat Nov 26, 2016 12:12 pm
Location: Virginia, USA
Contact:

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by cresive » Mon Jul 15, 2019 3:04 pm

House Blend wrote:
Mon Jul 15, 2019 9:09 am
Let's say that today is January 1, 2019. It is also your retirement date and 67th birthday. I'd look at it this way:

A. If I claim now, I get $33000 2019 dollars in 2019 and beyond.
B. If I claim later, I get $42000 2019 dollars starting in 2022.

My expenses will be higher than either of these figures, so I want to compare how much it will cost me to cover $42000 in 2019 dollars starting from now.

Under A, I need to buy an inflation indexed SPIA that pays $9000/year.

Under B, I need to have $42K 2019 dollars in 2019, 2020, and 2021.

For a period this short, I'd be looking at CDs or treasuries to cover years 2 and 3, whatever pays more. Let's say you can find 1 and 2 year CDs @ 3%/yr and inflation is 2%/year. (For longer delays, you might want to look at TIPS for the later years.)

That means you'd spend

42000 * (1 + (1.02/1.03) + (1.02/1.03)^2) ~= $124,800

to cover the income gap between age 67 and 70 benefits.

So under B, you are in effect getting a $9K/year inflation adjusted SPIA for a price of $124,800. That's a payout rate of 7.2%. Good luck finding that in the retail market.

If you want to work it out to 6 decimal places, you should also take taxes into account and the fact that SS income is taxed at a lower rate (and is often free of state tax), and that both SS and non-SS income can (depending on the ranges involved) increase how much of your SS benefit is taxable.
Nice perspective. Thanks for the walk through.

Topic Author
cresive
Posts: 358
Joined: Sat Nov 26, 2016 12:12 pm
Location: Virginia, USA
Contact:

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by cresive » Mon Jul 15, 2019 3:08 pm

firebirdparts wrote:
Mon Jul 15, 2019 10:15 am
Analysis of cash flows is very simple, really. You bring them back to their present value using the time value of money. What is maybe difficult in real life is assigning a cost of capital in real life. COLA's add a slight complexity in this. In your case you have another complicating factor of having to guess what happens to your investments during those 3 years, and, for sake of completeness, maybe forever.

Ignoring the complications, the simpler question is which one is "more money" and the math is easy.

If somebody pays me $1 10 years from now, and I say the cost of capital is 5% per year, then I would consider that dollar today to be worth $1/(1.05^10) which is 61 cents. I intend this as an example. You decide what the cost of capital is to you.

it is not proper to think you are earning 8% on your SS "asset" because it's actually a series of payments that is becoming 3 years shorter, and in addition to that, the money is in the future, and we don't value money in the future the same as we value money today.
Technically, you are correct. If I were to die at approx. 80 y.o. I would probably end up even as that is about the break even point. However, if I live until I am 88, I will have 8 years of extra income over claiming at 62 or 67. My original point was to inquire as to how best to evaluate a guaranteed source of income, as it should be worth more than a 4% rule of thumb. Your point moves more into whether or not I would enjoy the extra benefit payment at a later age--i.e. further into retirement. You also put forth the effect of inflation, which I admit I left out for purpose of the example.

Good points though.

sc9182
Posts: 313
Joined: Wed Aug 17, 2016 7:43 pm

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by sc9182 » Mon Jul 15, 2019 6:16 pm

Iirc, somewhere I read - if you have younger spouse with longer expected life (with lesser/none own SS benefits) than your own, you may be better off delaying to further maximize payments at higher level for longer time (especially for spouse who may be expected to live longer).

But haven’t researched on it - someone please chime in!

Big Dog
Posts: 1621
Joined: Mon Sep 07, 2015 4:12 pm

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by Big Dog » Mon Jul 15, 2019 6:29 pm

You also put forth the effect of inflation, which I admit I left out for purpose of the example.
You should also apply a mortality table to your cash flows (as the odds of making it to 85 is a lot less than making it to next year), something Mike Piper does in OpenSocialSecurity. (see advanced tab)

https://opensocialsecurity.com

columbia
Posts: 2140
Joined: Tue Aug 27, 2013 5:30 am

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by columbia » Mon Jul 15, 2019 6:52 pm

Big Dog wrote:
Mon Jul 15, 2019 6:29 pm
You also put forth the effect of inflation, which I admit I left out for purpose of the example.
You should also apply a mortality table to your cash flows (as the odds of making it to 85 is a lot less than making it to next year), something Mike Piper does in OpenSocialSecurity. (see advanced tab)

https://opensocialsecurity.com

I’m not sure that I get the part:
For each year up to age 115, the calculator multiplies the annual retirement benefit by the user's probability of being alive in such year, to arrive at a probability-weighted annual benefit.
115?

Big Dog
Posts: 1621
Joined: Mon Sep 07, 2015 4:12 pm

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by Big Dog » Mon Jul 15, 2019 7:02 pm

the mortality odds of making it to 115 is nearly zero, so the last few years of the PV are not much more than a rounding error. :)

User avatar
Peter Foley
Posts: 5006
Joined: Fri Nov 23, 2007 10:34 am
Location: Lake Wobegon

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by Peter Foley » Mon Jul 15, 2019 7:41 pm

I too like House Blend's approach.

I don't want to get too far off the OP's question, but the size of the deferred comp account should also be taken into consideration as well as the implications of a partner dying and RMDs in a single person's tax bracket.

polyphasic9
Posts: 6
Joined: Sun Jan 13, 2019 6:46 pm

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by polyphasic9 » Mon Jul 15, 2019 9:22 pm

My perception is that we're comparing two guaranteed annuities with uncertain durations, and that one of them has a three year delay before receiving higher payments.

A few thoughts:
-It's my understanding that if you live to exactly your expected lifespan, then it's a wash from an actuarial perspective.
-It's probably not appropriate to value the income streams (or the difference) using the 4% rule, since that's fundamentally a perpetuity. Instead you are choosing between two annuities, and they have a fairly constrained range of years that you'll be alive to collect them. So I while I find it intuitively appealing to just divide the $9000 by .04, I suggest that it's not quite the right approach. Moreover, I don't think it matches the intent of the person who created the rule.
-You may find it very useful to create a simple spreadsheet so that you can model the discount rate and see its effect on both annuities over a range of years. I'll drop in a quick image below.
a. Create a cell for the Discount rate.
b1. Create a column for Age.
b2. Create columns for the nominal FRA payment and the DRA payment.
b3. Create columns for the discounted value for both. For example, at age 70. PV(FRA) = 33000 / (1+discount)^(70-67). This provides the discounted value for each individual year.
b4. Now just create two more columns that sum up the cumulative value for the PVs. For example, the present value of FRA payments through age 70 is 128,168.
b5. Lastly, create a final column (delta) that subtracts the cumulative FRA from DRA. As we'd expect, waiting until Delayed Retirement Age to collect starts out behind, but starts to catch up being at age 70.

I apologize if this screenshot doesn't format correctly:

Discount Rate 0.02

Age FRA* DRA* PV(FRA*) PV(DRA*) CUMU PV(FRA*) CUMU PV(DRA*) Delta
67 33,000 33,000 - 33,000 - (33,000)
68 33,000 32,353 - 65,353 - (65,353)
69 33,000 31,719 - 97,072 - (97,072)
70 33,000 42,000 31,097 39,578 128,168 39,578 (88,591)
71 33,000 42,000 30,487 38,802 158,655 78,379 (80,276)
72 33,000 42,000 29,889 38,041 188,544 116,420 (72,124)
73 33,000 42,000 29,303 37,295 217,847 153,715 (64,133)
74 33,000 42,000 28,728 36,564 246,576 190,278 (56,298)
75 33,000 42,000 28,165 35,847 274,741 226,125 (48,616)
76 33,000 42,000 27,613 35,144 302,354 261,268 (41,085)
77 33,000 42,000 27,071 34,455 329,425 295,723 (33,702)
78 33,000 42,000 26,541 33,779 355,966 329,502 (26,464)
79 33,000 42,000 26,020 33,117 381,986 362,619 (19,367)
80 33,000 42,000 25,510 32,467 407,496 395,086 (12,410)
81 33,000 42,000 25,010 31,831 432,506 426,917 (5,589)
82 33,000 42,000 24,519 31,207 457,026 458,124 1,098
83 33,000 42,000 24,039 30,595 481,064 488,718 7,654
84 33,000 42,000 23,567 29,995 504,632 518,713 14,081
85 33,000 42,000 23,105 29,407 527,737 548,120 20,383
86 33,000 42,000 22,652 28,830 550,389 576,950 26,561
87 33,000 42,000 22,208 28,265 572,597 605,215 32,617
88 33,000 42,000 21,773 27,711 594,370 632,925 38,555
89 33,000 42,000 21,346 27,167 615,716 660,092 44,377
90 33,000 42,000 20,927 26,635 636,643 686,727 50,084
91 33,000 42,000 20,517 26,112 657,160 712,839 55,680
92 33,000 42,000 20,115 25,600 677,274 738,440 61,166
93 33,000 42,000 19,720 25,098 696,994 763,538 66,544
94 33,000 42,000 19,333 24,606 716,328 788,144 71,817
95 33,000 42,000 18,954 24,124 735,282 812,268 76,986
96 33,000 42,000 18,583 23,651 753,865 835,919 82,054
97 33,000 42,000 18,218 23,187 772,083 859,106 87,023
98 33,000 42,000 17,861 22,732 789,944 881,838 91,894
99 33,000 42,000 17,511 22,287 807,455 904,125 96,669
100 33,000 42,000 17,168 21,850 824,623 925,974 101,352

Observations:
-Just for fun I tried this with discounts ranging from .00 to .04. I was a bit surprised to observe that it really doesn't matter all that much. At a rate of .02, the break-even age is about 82. At a rate of zero, break-even is at age 80 (you should test a rate of zero to prove that the spreadsheet is working correctly anyway).
-The cumulative PV difference (delta) between FRA and DRA is material only if you die very soon into retirement or very late into retirement. To me, this is the key finding.

Caveats:
-This assumes you're indifferent to the timing of receiving the income, and care just about its present value. This is unrealistic, of course, since none of us would want to get a windfall yet die the following day, even if it has the same PV as a more useful alternative.
-Note that I'm assuming the full year of income is received at the very beginning of the year.
-I'm also cheating by ignoring inflation, instead assuming that it's exactly offset by COLA.
-I'm ignoring survivor and spousal benefits altogether.
-I'm ignoring the reasonable SS solvency concerns that others have already mentioned. One could crank up the discount rate to accommodate this.
-It's already past my bedtime, so I have not double-checked my logic, formulas, and assumptions. There are a lot of bright folks on this board who can likely contribute far better work, so I'll humbly defer to them.

User avatar
jeffyscott
Posts: 8422
Joined: Tue Feb 27, 2007 9:12 am
Location: Wisconsin

Re: Nuanced Benefit of delaying claiming of SSA Benefits

Post by jeffyscott » Mon Jul 15, 2019 9:43 pm

polyphasic9 wrote:
Mon Jul 15, 2019 9:22 pm
-I'm ignoring the reasonable SS solvency concerns that others have already mentioned. One could crank up the discount rate to accommodate this.
I did a similar analysis and then stuck in a 25% cut as of 2034 and, surprisingly that also did not change the results by much. I think it was similar to what you (and I) found with different discount rates, it changed break-even point by a couple years.
Time is your friend; impulse is your enemy. - John C. Bogle

Post Reply