Barron's article on Social Security

They (mostly insurance companies) would NEVER sell you such a thing!!! Never. That’s because they want to keep half the average 10% return over 30 years for themselves. They’ll give you 4% or maybe 5% and give you a whole song and dance about interest rates, time discounting, and other assorted BS. Then they will take the money and mostly invest it in long-term stuff, maybe not get quite 10%, but certainly 8% or so, give you your cut (in an actuarial manner), and keep the rest for themselves as profit (or float to invest forevermore).


Not only that but the assumption that waiting till 70 will get you more money throughout the remainder of your life because ya know things can’t change. If your child came to with math like that there’d be something like a lecture about “using your head”, more homework, or an outright spanking coming back.

Politicians have learned that they can change the rules for future generations, but if they do anything to harm current beneficiaries, or anyone within 10 years of collecting, they get voted out in the next election.

I’m not worried.


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And that’s why waiting until age 70 to collect SS is such a phenomenal deal. The Gov’t isn’t even adjusting the benefit at age 70 for “adverse selection” (i.e., only healthy people will wait, and the wealthiest Top 10% or so of the population who can afford to delay live 5 or 6 years longer than the average Social Security beneficiary.) It’s even a better deal that the mythical, zero-fee, “actuarily fair” annuity that an insurance company would never sell you.

Financial planners have been trying to explain this to clients for decades with no success. I guess you need to be able to read and understand a text book an acturial science to get the concept, which of course, few people will be able to do.


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Roe vs. Wade is an example of exactly the phenomenon we’re talking about. When politicians take something away from 50% of the population, they pay for it in the next election.



Remember, remember the 5th of Roevember.


May be… but thanks for acknowledging they can take it. When SS benefits are taken/ reduced it may not be 50% who are impacted.

It is all about probabilities. Sure, Congress has the power to cut benefits for current and soon-to-be retirees. But I don’t think they have the political will to do so. A much more likely scenario is that there would be some combination of tax increases/benefit cuts (aka means testing) for those under 50. Low probability event, in other words.

On the other hand, over every 8-year rolling period, the S&P 500 has had a negative real return 11% of the time and the median eight year real return is 6.7%

Compare that to guaranteed 8% plus inflation you get by delaying. Spunk your kid all you want, but one of these scenarios has much better odds.


What does that mean?


Good question. TMF does not allow the present tense form of the verb “spanking.”

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Ever assuming there IS another election…
Or to Steve’s point - another election in which they can vote.


There is as much if not more risk of the pols changing the laws as it pertains to taxes and retirement accounts than there is to changing SS for anyone currently on it or very near to turning it on. Roughly 50% of all retirees get 90%+ of their income from SS - thus the reason why it is called the “third rail” and no one is eager to take away any benefits.

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I don’t understand the logic of spending your money upfront and counting government will come through. The arguments like taxes can be raised, or capital gains taxes will be raised etc, doesn’t justify taking this risk.

Future is unknown, and you have no idea how long you will live, you may end up living much longer than you think.

I sincerely hope no one is going to gamble like this with their retirement.

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I don’t understand the logic of depending on a for-profit company (or many companies) will come through. That doesn’t justify taking the risk for me. (and I state that while being 100%+ equities currently).

That is the EXACT reason to delay SS. You might otherwise outlive the money you have saved while you can’t outlive SS.

Heh, experts - those with years of training in financial planning, have been providing such advise for decades. It is backed up with back-tested data. And, you would have to ask yourself why people in this industry, who are often compensated by AUM (assets under management), would be advising clients to spend their investment assets and delay SS (thus costing the Advisor AUM).

I think you would find that there is a high correlation between those that delay and the affluent. Additionally, those that delay actually often end up with EVEN MORE money left over.

Here is one such article written by Advisors again telling readers that they are better off spending down their retirement assets.

Delaying Is the Safer Bet

As Hopkins points out, the percentage of cases where the legacy amount is greater when claiming at 67 or 70 compared to 62 ranged from about 60% to almost 97%.

“This is a really telling finding,” Hopkins says. “The other thing I found really interesting was that delaying Social Security seems to help insulate clients against the worst-case scenario, in which you see the full amount of the client’s private wealth depleted during the retirement period.

“Overall, delaying from 62 to 70 provided a larger net legacy wealth amount at age 95 in 76.3% of historical periods considered,” Hopkins emphasizes. “That’s basically saying that, three out of four times, you’re going to be better off delaying and favoring the spending down of your private assets early on in that retirement period.”

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Another good study worth reading:

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Which is ironic considering the common slang (Br.) meaning of the term you wrote.


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Reasonable minds can disagree, but I find it implausible that there are 60 US senators who would be willing to end risk their careers by taking away promised benefits for people over about the age of 50.

That said, this article by Kitces explains why there is an enormous financial benefit to delaying. There are all kinds of risks in life, and you can’t mitigate against all of them. So, I like to start with the biggest risks first and go down the list.

  • Calculated in this manner (including the value of dollars received by claiming early in the comparison), the reality is that for those whose greatest retirement “risk” is living far past life expectancy, the decision to delay Social Security can actually be a highly beneficial investment , with a real return that dominates TIPS, is radically superior to commercially available annuities, and even generates a real return comparable to equities but without any market risk!*

Yep, which is why I chose that word. TMF manages this board like we’re pre-teens.

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That is the brilliance of requiring extreme levels of proving being a citizen, or legal immigrant, to qualify for SS. The cut in SS spending would be immediate, as current retirees are tossed off the SS roles, and are required to pay back all benefits received, or be tossed in prison for fraud.

I would suspect that the parents of most current retirees are deceased, so cannot tell the current retirees where to look for their parent’s birth certificates, to prove they aren’t “anchor babies”.

And, the moment SS decides people have not proven their citizenship, the SoS of their state of residence is ordered to take the people off their voter roles, so they can’t punish the pols for passing the law.

And the entire thing is surgical, not yanking SS benefits away from everyone over 50, or over 60, or whatever dividing line. It only robs the portion of the cohort who don’t have their papers in order.

A recent survey shows over 50% of USians support the scheme to deport all 11M, or however many, illegals that are in the US. The same survey shows 30% of one faction, and 46% of another faction, support repeal of birthright citizenship as stated in the 14th amendment. I bet a measure to “make sure no illegal receives SS” would enjoy at least as much support. After all, an idea does not need to be supported by over 50% of everyone, to pass. It only requires over 50% of the gang in power.

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So they have a problem. IMO, they are not US citizens, so they must be deported first. I already have my document(s) proving “natural born” US citizenship–all embossed by the state bureaucracy as being legitimate and issued by state.