I am leaning toward doing what you've done. The one argument for taking it later is so that you are safer if you happen to live longer doesn't really hold water as far as I'm concerned.
IF you don't take SS at age 62 because you have enough to live on comfortably all the way to age 70, then taking it early could HELP you have enough money (and have ALL that money be within your control) if you happen to live long.
Suppose you (not YOU, but anyone) are going to get $19,000 a year in SS that goes up 2% each year with inflation. Now, suppose that since you don't need that money that you park it in a mutual fund that earns 6% (it could be more than that depending on how you have it invested -- in fact, since in this scenario you don't really need it at age 62, why not go decently aggressive and hope to get 8% or more?). Here's what happens to that money in 8 years at just 6% annual return:
...turns into $213,177.67. Since you're now 70, if you assume you might live to 90, you could take 5% of that minimum each year. That's an additional $10,658.88 per year. Since it is invested and likely earning some sort of return, you could likely take more.
This is an incompetent analysis.
First of all, you compare amounts adjusted for inflation with amounts that are not adjusted for inflation. In this analysis I'll state all amounts in 2013 dollars.
If your SS benefit at age 62 is $19,000 per year, then your SS benefit at age 70 will be 132% of that amount or $25,080,
not including the annual COLA adjustment. That amount is guaranteed and is not based on investing luck. (I assume political risk is negligible if not zero. You apparently agree since you do not list it as a motivation for your take-early decision. I also adopt your assumption that spousal benefits are not relevant.)
If at age 62 you instead decide to take your SS benefits and invest them, you will deposit $19,000 per year always in 2013 dollars because of the COLA. You assume you will receive a 6% return in nominal dollars. Since you also assume a 2% inflation rate, this means that your real rate of return is 4%. So, at age 70 your investment of your SS benefits will accumulate to $175,000 stated in 2013 dollars, not the amount you state. (I am assuming, probably incorrectly, that you will pay $0 federal and state income taxes on the SS benefit and that all of it will be deposited to your after-tax investment account.)
Now, you (crucially) assume that you will die at age 90 and can therefore safely spend 5% of the portfolio per year. That will be $8,750 per year in 2013 dollars, which combined with your SS benefit will be $27,750 per year of income, in 2013 dollars. This compares to the SS benefit with DRC at age 90 of $25,080. Your expected real income would be 10.6% higher than the real SS benefit with DRC.
But this comparison is deceptive in many ways. For one thing, the higher SS benefit is pretty much certain while the returns from investment are no more than a guess and could be much worse. Or better, of course. But the big failure in your analysis is that by guessing that you will die at age 90 and by not setting up a backup plan if you live to 100 or more, you are assuming away the problem that you (and we) are trying to solve. Namely, how to fund the rest of our lives when we don't know how long we will live. Of course, if we did know how long we will live the problem would be much easier to solve. But we don't.
So, now what happens if at ages 91, 92, 93 and beyond when you are unexpectedly still breathing. Your investment portfolio will dry up while the SS benefit will continue to grow, not just from the COLA, but likely from planned increases in the PIA beyond the current benefit level. These increases are not certain however. So, we'll leave them out of the analysis.
Also, what happens if inflation is higher than the 2% that you assume? The SSA will adjust the COLA, but your investments might not do well, just as the stock market did poorly during the high inflation period of the 70's. 2% is a reasonable guess at this time, but your analysis does not reflect the substantial uncertainty that exists, nor does it provide a solution in the way that SS does.
If you have thought clearly about the risk of unexpected old age you would have realized that under your portfolio plan you would need to increase savings to provide for that possibility reducing your disposable income to an amount probably below the SS with DRC benefit level. Instead, like all of the other posters who reach the same conclusion you assume away the problem and decide to spend the funds that you would need to save to cope with it. As I say, not competent.
How likely is it that you will live on into your 90's? Hard to say. I know a number of people who are alive or have lived into the upper 90's and beyond 100. On the other hand, I have never known anyone whose house has burned down. But everyone I knew who owned a house had fire insurance on it.
People should buy insurance when they face a risk that they cannot afford to bear themselves. A house burning down falls into that category for most people. So does outliving your money. If you accept a risk that you could pay the SSA to assume for you, to some degree, but then just spend the insurance premium assuming that you will get "lucky", then you are just living beyond your means. It might work out, if you're lucky in one or more ways, but the analysis you post in support of that decision is just not competent because it doesn't reflect the actual level of uncertainty that exists.
