not sure that's really "new math". Isn't this sort of old news?
It used to be a closer call, when people didn’t live as long and when interest rates were higher. But these days, I think the math is clear: People should delay claiming when possible. That’s especially true for singles and the higher-earning spouse from a married couple.
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By reducing financial assets a bit more quickly in the short-run, delaying Social Security can ultimately support more overall spending in retirement and/or will eventually support an even larger legacy value for assets as well.
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However, Social Security is no longer actuarially fair. Those calculations were done in the early 1980s when interest rates were higher and when people weren’t living as long as they do today. With lower interest rates and longer lives today, the calculus leans toward delay as an advantageous route for new beneficiaries.
I'm taking a measured approach to deferring. I have 3 deferrable "pensions"; a state pension, UK SS and US SS. The respective annual deferral increases are 5%, 5.8% and 8%. I will take the state pension at 55 to give me stable income in early retirement, the UK SS at normal retirement age of 67 and the US SS at 70.
SS is quite the opposite and I plan to delay until 70. Sure will look silly though if benefits are substantially cut or means tested by then.
The math is straight forward and one factor to consider in all these discussions about SS. Personally I don't think nearly enough attention though is focused on taking SS as soon as possible if it allows one to enjoy the healthier early years of retirement. I've seen enough old people delay living so they have more money and for what?
I think the majority of people have gotten into the position of needing to take SS early by not delaying gratification. The people who can afford to delay tend to be able to do so because they accumulated a healthy nest egg that will get them through the gap.
Sure will look silly though if benefits are substantially cut or means tested by then.
The math is straight forward and one factor to consider in all these discussions about SS. Personally I don't think nearly enough attention though is focused on taking SS as soon as possible if it allows one to enjoy the healthier early years of retirement. I've seen enough old people delay living so they have more money and for what?
. Sure will look silly though if benefits are substantially cut or means tested by then.
I've done as much planning as I think I can, but even so it's possible for future events to unfold in an unexpected way. I view SS, along with downsizing my house, as one of the reinforcements I can call on in case of adverse events. If all goes to plan, I'll take it at 70. If I need the money, I will be able to change this plan and take SS early.Our plan is to delay SS if possible. But, SS is a good fall back option to deal with a poor market performance.
How about for dealing with the higher medical expenses that tend to come along as you age? I think the majority of people have gotten into the position of needing to take SS early by not delaying gratification. The people who can afford to delay tend to be able to do so because they accumulated a healthy nest egg that will get them through the gap. They can use that to enjoy themselves while they are younger. Having the larger annuity when you are older is a safety feature, especially the part about survivor benefits for the lower earning partner. People who save tend tolike safety.
I think it's a good article. I hadn't thought about setting aside money for 8 years and then managing the rest separately, so it is something for me to think about.