This advice they keep giving us to wait until 70 to take Social Security is WRONG.
Your benefits will go up by 8% a year, but this is not the same as investing a nest egg at 8%, because you have no principal.
Instead, you will be PAYING for those increases through benefits not received during the wait. It can take up to twenty years at the higher benefit to make up for all those lost benefits you so strategically rejected for 4-8 years.
In other words, if you don't wait, you will have accumulated quite a bundle by the time you are seventy, but if you do wait, you will have nothing to show for it at 70 other than the fact that your monthly benefits will be higher. That monthly increase, set aside, will not add up to what you turned down until you are somewhere near 90.
So unless you're sure you'll hit ninety and see a net gain, take benefits as early as you are eligible, all other things being equal (e.g. don't retire early just to take early SS).When you finally hit 90, your are unlikely to think, "**bleep**, I wish I'd waited."
Even if you don't need Social Security, take it early and invest your monthly payments. Later you can use THAT nest egg to pay yourself whatever extra you would have made by waiting until 70. If you've invested according to conventional wisdom, you may be well past 100 before you'll say, "**bleep**, I wish I'd waited."
I took it early, and it has quite obviously paid off. I keep telling Jane this and I sent her the figures, but she refuses to answer other than an answer saying she won't answer. I don't understand these people.
As you decide when to take Social Security, do the math. It is simple math. Add up the total benefits you would receive between now and 70 if you don't wait. Divide that total by the monthly benefit increase you'd get if you do wait. That's how many months it will take you to break even. Divide by twelve, add to 70, and that's how old you will be. Is it worth the wait?