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Off Topic Off Topic - General non-Corvette related discussion. |
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05-04-2024, 1:15pm | #161 | ||||||
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05-05-2024, 1:14pm | #162 | ||||||
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Sorry to bring this back on topic.
Does anyone know if the SSAs projections of your benefits are in 2024 dollars or have they baked in an escalator to the age 67 or 70 estimates? I ask this because if you assume an annual 2% increase in the 2024/62yo benefit, the spread between the 62 and 70yo benefit isn't as bad but the break even point is around 80. If you saved the your benefits from 62-70 and put that money in a 5% annuity (which I would never do, but you can make your own), the difference in income between my 70 benefit and my 62 benefit + annual increase + annuity payout is only $150/month (for me)...or so small that the errors in my assumptions make the difference meaningless. If I assumed I saved all of my benefits and got a 5% return, the break even point is 92 or 93! By age 80 I'd have more than $1MM saved. I've always believed it is better for the lower earner to take benefits at 62 and higher earner the 70 yo benefit and the survivor gets the 70 benefit. I'm now questioning that. Has anyone worked this out? Am I missing something? |
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05-05-2024, 1:33pm | #163 | |||||||
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05-05-2024, 1:59pm | #164 | |||||||
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05-05-2024, 2:26pm | #165 | |||||||
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You can take 70% of your benefit at 62, 100% of your benefit at 67, and 124% of your benefit if you wait until age 70. If you think about it, we can calculate the break even age for a benefit of $1 per month, and it the algebra will work for any number of monthly benefit. So, if I want to see when I will "break even" taking my benefit at 62 instead of 67, all you need is this equation: Let B = the number of months collecting the benefit 0.7 x B = B - 60 Simplifying, we get: 0.3 x B = 60 B = 200 200 months is 16 years and 8 months, so you will get more benefit from collecting at 62 if you die before you are 78 and 8 months old. Want it for 70 years old? 0.7 x B = 1.24 x (B - 96) 0.7B = 1.24B - 119.04 0.54B = 119.04 B = 220.4 220 months is 18 years and 4.4 months, so you will get more benefit from collecting at 62 if you die before you are 80 and 4.4 months old. Want the comparison between 67 and 70? B = 1.24 x (B - 36) B = 1.24B - 44.64 0.24B = 44.64 B = 186 186 months is 15 years and 6 months, so you will get more benefit from collecting at 67 if you die before you are 82 and 6 months old. |
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05-05-2024, 2:39pm | #166 | ||||||||
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So if SSA today says my benefit @70 is 4358 and I'm 59, then I'll actually be getting $5312 in 2034 dollars (assuming 2% COLA). That changes my math a little. |
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05-05-2024, 3:15pm | #167 | ||||||
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I'm on my second year of social security and third year of retirement. I've found that the COLA in my pension and the COLA in my SS are about 2 to 3%. Where I am, in CA, since 2020, the cost of food and energy is up 50%. So in my personal experience, the COLA raises don't even come close to keeping up with our new Bidenflation. Also, once again, why do so many people assume that at age 80 they'll be exactly like they were at 55 or 60, just with a bigger paycheck? "Can't wait until I'm 80 to start to go see the world and learn to mountain climb! I'll have all the extra money to do it, too! Hell Yes!"
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05-05-2024, 6:04pm | #168 | ||||||
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I just did the math using a spreadsheet. Assuming 2.3% COLA, 6% growth in my portfolio, comparing the sum of present value for three different scenarios:
1. Take it now. 2. Delay to FRA 3. Delay to age 70. Projected out 30 years, 1 is better than 2, 3 is better than 1. The difference is very small. If FedCo does as I expect, and decrease my benefit in the future, then scenario 1 wins. |
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