Originally Posted by CCdaCE
In regards to delaying SS, maybe you'll have to reference the original conversation... and I missed this part but...
What about the $125K you gave up based on NOT getting roughly $1300/month or $15.6K for the 8 years between 62 and 70. The $15.6K income times 25 would require a portfolio of $390K.
There must be a breakeven analysis in here somewhere...
I agree that I have an error in my calculation, but you have a larger one in yours. Let me explain and correct it.
Yes, there is the $125K plus some interest you forego by not taking SS at age 62. This would work out roughly to $150K at age 70. This would throw off an additional $6K of income with a SWR of 4% from age 70 on. So with an extra $14K of income at age 70 offset by $6K would still give you $8K more per year - Or the Equivalent of needing an extra $200K in your portfoilo, if you took SS at age 62 to match the income gained by delaying to age 70.
The extra 15.6K of income that you referred to would not require a portfoilo of $390K because it only lasts for 8 years. Rather than a 40 year span which the 4% is usually calculated from.
So, even ignoring some tax advantages, delaying SS to age 70 allows you to spend an extra $200K+ from age 62-70
and still be in the same portfoilo position as if you did not spend it and took SS at age 62!
The break-even point that you reference is irrelevant, if you are concerned with spending money instead of heaping it in a pile to leave to some heirs! I used to think about it this way, until I started thinking in terms of spending the money instead of piling it up!