Taylor: The right age to start collecting Social Security? Well, it depends. When will you die?
In this Feb. 11, 2005 file photo, trays of printed social security checks wait to be mailed from the U.S. Treasury's Financial Management services facility in Philadelphia.“I have read a lot about postponing Social Security until age 70.
Two other extremes bracket our decision. First, if you need the money to cover your monthly costs at age 62, this choice is easy. You take the payments. For further discussion, I’m assuming, based on Tracey’s question, that she is not yet 62. This implies she was born in 1960 or later. For this cohort, “full retirement” benefits start at 67.. Sixty-seven is the retirement age for full benefits. For every month you delay taking Social Security after age 67, you get a payment that’s two-thirds of 1 percent higher. That sounds weird, but it works out to a payment that’s 8 percent higher for every year you delay.
To return to Tracey’s original question, one simple mathematical thing we can say is that if you wait until 70 to receive your 24 percent bump in full retirement pay, it will still take more than four full years to make up just one year of forgone full-retirement payments. Even by 80, with the 24 percent boosted pay, you will have received less from Social Security than if you’d taken the 30 percent reduced payments starting at age 62.
Time-value-of-money math makes taking Social Security earlier than 70 a preferred bet under more mortality scenarios. Social Security retirees do benefit from upward inflation adjustments, but receiving money earlier still has intrinsic value over future money, again because of the advantage of buying beer now.A breakdown of key state and local races and candidates on the March 1 ballot.
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