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No. of Recommendations: 4
PSUEngineer writes,

Retirement decisions are not always based on arithmetic.


Of course.

The conventional wisdom is that one should take SS as soon as possible, because SS is going broke and a "bird in the hand is better than a bird in the bush.". It's simple, direct, and doesn't require much in the way of examination or thinking.

If you dig a little deeper, read the relevant research, and learn a little bit about mortality tables and actuarial science, you'll find that by giving you the option to take SS at any age between 62 and 70, the US Gov't is effectively allowing you to buy an inflation-adjusted life annuity for about half the premium that a commercial insurer would change for the same monthly benefit if you wait until age 70. That amounts to about a $200,000 savings for single person getting the maximum Social Security check and $300,000 if you add the 50% spousal benefit for a non-working spouse.

Nobody is more anti-annuity than me, largely because of the high fees, commissions and costs associated with any kind of for-profit insurance product. But if I find someone willing to sell me an annuity for 1/2 price, I'm at least going to put pencil to paper to see if it's a good deal. And if mortality tables and actuarial math are beyond me, this might be one of the few instances where paying a financial advisor to run through the calculation would be worthwhile.

Even for someone like me, $200,000 to $300,000 is a lot of money to leave on the table.

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