Thought I'd calculate whether it would make more sense to take ss at 62 or 70.
According to SS,
my mo ss pmts at 62 yo = $2010
my mo ss pmts at 70 yo = $3522
For comparison, I thought I'd compare by taking ss at 62, saving the proceeds for the 8 years difference between the 2 options. Then calc a mo annuity pmt from the savings after 8 years. Then compare the sum of the 62yo ss + monthly return from the savings to the 70yo ss.
Given 8 years between 62 and 70, if I invest the $2010 pmts(less 15% for taxes) at 4% for 8 years, I get a value of $192,921.32 at age 70.
Calc’d in excel =2010*.85*(((1+0.0033)^96)-1)/.0033
where .0033 is the monthly interest rate (.04/12)
I then calc’d the monthly payments I would receive from the $192,921.32 lump sum, adjusting the number of payments in the formula so that the calc’d payment equaled the difference between the 62yo and 70yo monthly payments ($1512)
In excel = PMT(rate,periods,PV,FV)
So = PMT(.0033,167,192921.32,0) yields 167 payments of $1508.31.
167 months = 13 years, 11 months.
So, unless my math is wrong, I would have to live to 84 yo before the take ss at 70 option makes more monthly $ than taking it at 62 and saving it until 70?
Does this make sense?