When to take Social Security
Hello Terry,
I’m sure many retirees face the following dilemma and I was hoping you could shed some light on it. I’m about to turn 62 and am retired. Say I am living off of $25k/yr from an IRA in which I can get market returns of 10%/yr and my SS would also be $25k/yr. I realize that by living off of my IRA and waiting until age 70 my SS will grow approx. 7%/yr (6% from age 62-67 and then 8% age 68-70). I also realize that my “breakeven” age for SS is approx. 80 and let’s say I expect to live well past that so it would make sense to wait to collect SS. Assume I live in a state with no tax consequences since no retirement or SS is taxed. My question is: Everyone always says to wait to take SS but it seems if I take it early at 62 wouldn’t it be better to let my IRA grow at a higher rate of return than SS? Said another way, which is more important, getting more SS by beating my breakeven age of 80 or letting my IRA grow at a higher return rate?
Terry Says
Your IRA is not guaranteed to grow at a higher return rate! Social Security IS guaranteed to grow 8% a year!!
Plus, a higher starting benefit gives you a higher base for future inflation adjustments.
Read this: https://www.terrysavage.com/when-to-take-social-security/
