UnThreaded | Threaded | Whole Thread (110) | Ignore Thread Prev | Next
Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76397  
Subject: Re: What age to take SS payments? Date: 12/9/2013 12:59 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 3
I can't think of a single investment that I can make that will safely return 8%. If I can live on my dividend and interest income from age 62 to 70, Social Security will be like a delayed lifetime annuity with an 8% return.

Delaying SS doesn't give you an 8% return. It just increases your eventual benefit by 8% for each year of delay (up to 70). But you forgo any benefit payment for that year. If you go around thinking that you're getting 8% return, then you are going to make bad decisions based on erroneous assumptions.

Example:
No delay, take for 5 years:
Total received: 5 * 12 * $1000 = $60,000
vs.
1 year delay followed by 4 years of payments.
Total received: 1 * $0 + 4 * 12 * $1080 = $51,840

You gave up $12,000 but gained $80/mo for the rest of your life (after the defer period). How long will it take you to that $12,000 you gave up? 1000/80 = 12000/960 = 12.5 years.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (110) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
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.
Post of the Day:
Macro Economics

Economic Implications of Cuba
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! 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.
Advertisement