Ask Terry Questions SS benefits, 65yo vs. 70yo

SS benefits, 65yo vs. 70yo

By Terry Savage on July 13, 2021 | Financial Planning / Retirement

Terry,
I read your “The Savage Truth” article in the Orlando Sentinel today. 7/11/21. I am 72 years old now and did a calculation regarding SS benefits when I was 65 yo.

I randomly pick out a SS benefit of $1500/mo.( a good estimate for people who worked for a number of years) and did a calculation of how much I would get from the SS by the time I was 80 years old which totaled $270,000. [$1500 x 12 mos/yr. x 15 years] I then calculated not taking SS until I was 70 and came up with a monthly benefit of $2204/mo. [1.08 x $1500 at 66, 1.08 x $1620 at 67, etc.] I then calculated at 80 yo I would get approx. $264,480 total. [$2204 x 12mos. X 10years]
I did not take into consideration a potential 2-3% increase in yearly SS benefits during the 65 to 80 yo time frame and do not know if the SS Administration includes the 2-3% increase from 65 to 70 yo when you do not claim benefits.
The waiting until 70 to claim benefits calculations shows a person would be approx. 80 years old before the benefits would be more than taking benefits at 65 yo. I would see a benefit in taking the SS benefit early since I would use the money for travel, etc., more at 65 yo vs, 80 plus years old.

Where is my logic and calculations in error?

Keep up the good work in “The Savage Truth”….. They are informative.

Sid Grow
3245 Kingston Way
Tavares, Fl 32778
(352) 343-6190

Terry Says

That’s entirely up to you — but I will tell you what you are missing in your calculations. If inflation returns, and I think it will, you will have a higher base check on which those adjustments are made. It might not matter much now, but at the last years of your life (and I’m sure your life expectancy is closer to 90 than 80) then you will have a larger check.
So you “pays your money and you takes your chances” as the old carnival barkers used to say! Enjoy and travel now, and life will statistically be tougher later on!

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