Few posters have done a math analysis of the costs of the extra TAXABLE 401K and IRA withdrawals that would be necessary to support their lifestyle from age 62-70 years old while they wait to collect Social Security. (You are paying the full tax rate to withdraw money from your 401K or IRA.)
OR:
The cost of pulling the money out of the savings and 401K, IRA during the years they are 62-70 if there is a bear stock market during that period. If you are collecting social security during that period you would not need to be taking as much money out during those bear market years and will have more money in your retirement accounts at age 70 going forward.
I believe this is true as most here have so much income in retirement the reduction to the portfolio is not really a factor in any retirement outcome and only serves to raise the bottom for a worst case scenario. With an average retirement portfolio of 300K or below spending that down in order to increase Social Security is foolish and bad advice as too much of the portfolio is lost to taxes. An early retiree in this case needs to be able to control their expenses. If that is not possible then waiting as long as possible to collect Social Security is the best course because of behavioral deficiencies.
But with 300K in a 401K pretax and choice between SS or not the taking of $1800 a month in Social Security and limiting only spending to income a 300K portfolio can produce (I suggest the following portfolio for the average retiree: 100K in my 5% portfolio as outlined in a different thread, 100K in 5 year CD or ST bond ladder, 100K in VTI-- spending 3% of balance or income produced per year whichever is higher) or the income produced by the 10 stock dividend portfolio, presently that portfolio composition will produce $9,250 in income. This results in total income of $30,850
The alternative is to spend at 3,000 per month or $36,000 annually increased by the amount SS increases each year until age 70 and begin collecting whatever Social Security offers in 8 years.
For ages 62-65 to take the 2nd portfolio and not SS means you have $5,150 more in income but you will pay $2,392.50 more in Federal Income Taxes than the first portfolio. Also if you take the ACA and take a silver plan you will also pay $840 per year for reduced subsidies resulting in $3,232.50 effective taxes on the $5,150 or 63 percent marginal taxes on 5K of income, a particularly poor use of a portfolio.
The idea that one should therefore work is equally bad idea, why should one work at age 62 if they don’t want to? At $30,850 per year one could live in Chicago by renting a Streeterville Studio with nearly 500 square feet of space comfortably having an indoor pool, indoor tennis courts of high quality available for free use, pool table ping pong tables, fitness equipment equal to health clubs a terrace garden and barbeque area with sunning lounge chairs and outdoor seating for enjoying an evening with friends on an income that should be growing faster than inflation. And in a neighborhood where the average income is $141,000 and all the advantages that living in such a neighborhood provides.
The loss of surety of income is offset by the low portfolio retiree by a greater likelihood of a portfolio upon which one could count on in case a move to nursing home is required late in retirement. At average costs today taking 1800 a month in social security and needing full nursing home assistance a 300K portfolio will provide nearly 5 years of nursing care in a private room or 7 years in a semi private room which will not be possible if one spends a 300K portfolio down in order to have greater Social Security.