bmcgonig
Thinks s/he gets paid by the post
- Joined
- Aug 31, 2009
- Messages
- 1,578
HI All
My head may not be working properly today (or most days ) , so Im wondering if someone can please explain this to me?
I read this scenario somewhere on Bogleheads a long while back about taking SS early versus late.
Lets say I’m 62 and have a portfolio valued 1.4M and Im trying to decide whether to take SS now or at 70. Ive used AnyPia to determine that at 62 I would get 23500/yr and 40464/yr at 70.
Heres the example that gets me:
Scenario 1:
I take 8 years of 40464 (what I get at 70) and place it in a separate account, paying 1-2%. (and I know that money is fungible etc.) I used this account to pay myself 40464 a year until SS starts at 70. So about 300k would cover it, maybe a little more. My new portfolio value would be 1.1M.
Then I take 3% (or any number) of the remaining portfolio every year. Thus I get 40464 + 33000 = 73464/year.
Scenario 2:
If, instead I take it at 62, then I get 23500 + 42000 (3% of 1.4M) = 65500.
What accounts for this large difference? Could my SS number from AnyPia be incorrect? Or is it just the 6-8% increase in SS every year, or is there some funny assumptions or math here that is tricking me?
Thanks guys!
My head may not be working properly today (or most days ) , so Im wondering if someone can please explain this to me?
I read this scenario somewhere on Bogleheads a long while back about taking SS early versus late.
Lets say I’m 62 and have a portfolio valued 1.4M and Im trying to decide whether to take SS now or at 70. Ive used AnyPia to determine that at 62 I would get 23500/yr and 40464/yr at 70.
Heres the example that gets me:
Scenario 1:
I take 8 years of 40464 (what I get at 70) and place it in a separate account, paying 1-2%. (and I know that money is fungible etc.) I used this account to pay myself 40464 a year until SS starts at 70. So about 300k would cover it, maybe a little more. My new portfolio value would be 1.1M.
Then I take 3% (or any number) of the remaining portfolio every year. Thus I get 40464 + 33000 = 73464/year.
Scenario 2:
If, instead I take it at 62, then I get 23500 + 42000 (3% of 1.4M) = 65500.
What accounts for this large difference? Could my SS number from AnyPia be incorrect? Or is it just the 6-8% increase in SS every year, or is there some funny assumptions or math here that is tricking me?
Thanks guys!