Taking Early Social Security

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Originally Posted by 1fuzzball I enjoy this website and have a question maybe someone can help me with. Many articles and opinions suggest taking SS as late as possible to increase the payout. My question is if someone has what they perceive to be enough to fund their retirement lifestyle via retirement accounts, rental properties, pension and cash savings, why wouldn't you take SS as early as possible and use that pool of money to help fund retirement rather than drawing down your personal assets? It just seems to me it would be better to not use personal assets and let them continue to grow if you can offset the income you may need by taking SS at 62. Hope this makes sense. Thanks in advance for any opinions.

From a strictly financial standpoint you can look at it the other way around too:

Why wouldn't you draw from your portfolio early to fund retirement instead of drawing down your SS assets?

If you took your early SS payments and invested them at some rate of return you could replace the difference between early and late SS benefits. Though a COLA'd annuity would be really expensive, a 4% SWR portfolio might be OK. So depending on your assumed future rate of return, SS replacement preferences, and life expectancy, early or late SS payments might come out ahead on paper.

If you assume a low rate of return for your portfolio, it may be that you will end up with more lifetime spending by letting SS grow by its 8% per year (not compounded). Why spend your fastest growing asset first?

Then of course there is all the insurance aspects of SS, which are more of a personal preference decision.