@Prestonator You posted a great question that is somewhat complex to answer without some knowledge of the time value of money as well as other factors such as Survivor Benefits, if applicable. I have heard many folks simply state that delaying SS benefits for 5 years to obtain a greater monthly benefit is better than starting at age 62. On a "nominal basis", it is. Using approximate benefit amounts such as $1,000/month currently (age 62) and a delayed amount such as $1,500/month in the future (age 67), it is clear that $1,500 is greater than $1,000. However, to compare these amounts on a "real basis" (not including a factor for inflation/cost of living increases), I would use the present value approach which takes into account the time value of money. You can also develop probabilities for a different life expectancy which is important, For purposes of providing a starting point, here are some numbers to review based on a life expectancy of age 87. First, using a discount rate of 3%, the present value of $1,000/month for 300 months (ages 62 to 87) is $211,004. Using the same 3% discount rate, the present value of $1,500/month for 240 months (age 67 to 87) is $232,977 or about $22,000 greater. Keep in mind that the $1,500.month cash flow starts 5 years later which means $0.00 for the first 5 years. So, there is a slight monetary advantage to delaying to age 67, but than advantage occurs much later in the time line. Another view is to look at the $22,000 advantage as an "average" over the 25 year life expectancy which is an average of $880.00 per year. Please note that the values will change based on a different discount rate and greater/lessor life expectancy. Another factor is the amount of Survivor Benefit that may become payable and when it become payable should you predecease your spouse. For the above calculations, you are both living at age 87. Hope this helps.
