New Thinking
Recycles dryer sheets
Re: When to take SS
Like I said, I am no expert in FireCalc, but I am trying to understand how this works
I use your SS amounts of $15,000 for husband and $7,000 (not $7,500) for the spouse and then delay these amounts until 70 for husband ($26,400) and $10,000 at age 66 for spouse. I get same 100% success rate but a higher average portfolio value ($4.4 million compared to $4.3 million). This is before I would go to a higher weight into equities due to the higher SS..
Like I said, I am no expert in FireCalc, but I am trying to understand how this works
Here is a simple numerical example which illustrates the point CFB has been making. It also makes it clear why FireCalc prefers taking SS early.
Assume you have a 62 year-old married man (no pension) with a nest egg of $1.5 million. He needs 60K per year (4% SWR). His age 62 SS benefit is 15K. By taking it at 62, he reduces his SWR to 3% (100% safe according to FireCalc) with a 75/25 equity/fixed asset allocation. If his wife is also 62, she gets half of his SS, or another 7.5K. Now he only needs to withdraw 37.5K from his nest egg which further reduces his SWR to 2.5%, a rate than can probably be covered (in today's dollars) in perpetuity from the divs/interest thrown off from his portfolio. Heck, TIPS yield nearly this much.
I use your SS amounts of $15,000 for husband and $7,000 (not $7,500) for the spouse and then delay these amounts until 70 for husband ($26,400) and $10,000 at age 66 for spouse. I get same 100% success rate but a higher average portfolio value ($4.4 million compared to $4.3 million). This is before I would go to a higher weight into equities due to the higher SS..