No. of Recommendations: 0
Hawkwin wrote:
I met with a client today that is looking to save over $200 a month when she drops her COBRA in January. She is delaying SS, taking some IRA distributions this year to then use that to generate dividend income (tax free under current tax rules) while she postpones SS.

You say this as though it helps her end up with more money. I think, from playing around with Ray's spreadsheet, that it costs her money. Since it sounds like you are giving paid advice, can you share what financial modeling you are using to convince yourself that you are advising her correctly?

I think now I'm clear on delaying SS being useful for three things:
- if you tend to throw away money it enforces savings
- it's poverty insurance in case you invest badly
- it gets you more money if you live a really long time

But it does this at the cost of you having less money than if you just take the SS money starting at 62 and shove it in with savings. And you'll continue to have less money until around age 90 when the higher payout finally catches up.

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.