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Author: 2plus2equals Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75782  
Subject: Re: social security planning Date: 3/18/2000 2:52 PM
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Lots of messages here are missing the fact that the inflation adjustments are higher if you take full retirement at 65. E.g. a 2.5% inflation adjustment on $1200 is more than on $960. Cumulative inflation adjustments over 20-30 years will really matter. With either full or early retirement, all the inflation after you are 62 is credited to you, so you get the right answer if you do all comparisons in constant dollars and ignore inflation and the inflation adjustment. BUT, when you consider the investment value of the money received between 62 and 65, then you can only count returns that exceed inflation and taxes. An 8% return last year is really 5.5% in constant dollars probably less after taxes.

Despite everyone's experiences in recent years, it is really unlikely that in the long term you can beat inflation by more than 4%. With 4% investment returns after inflation, the breakeven point between early and full retirement is about 82. Do the math yourself with your own assumptions and check it out. I think previous posters who have tried to justify an opinion with some math have gotten it wrong.
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