It’s an asset allocation decision. It makes sense to me that “delaying SS to age 70 is the highest returning asset in your bond portfolio” from what I understand to be the value of an inflation-adjusted lifetime pension benefit. Could I make more by taking SS at age 62 and investing it? Possibly. But I’m already 95%+ stock. Do I really need a higher allocation?
Exactly! This is why some people are rankled when you compare your 20 year old I-bond returns to your stock returns. The I-bond returns shouldn’t be compared to the stock returns, they should be compared to the other options you had/have for your bond portfolio (about 10 years of expenses, and more recently 5 years of expenses). And your I-bonds from 20 years ago, at CPI+3% or CPI+3.2% or CPI+3.4% handily beat ALL other reasonably safe fixed income assets over the ensuing periods of time (5 years, 10 years, or 30 years).
I’m married with two SS streams, one high and one low. We’re delaying the larger because the annuity aspects are comforting and appealing, …
We are delaying the larger SS stream because it is insurance that covers both of us, even in the event that the other is no longer there. It is one of the ways I have identified to protect ourselves from ourselves as we age. We are fortunate that we don’t (currently anyway,) have to make our SS stream work for us. If I can max it out as a back up to other investments, it’s good sleep at night decision.
We are also using the time of no SS income to reposition our TIRAs via Roth Conversions and sell assets at a lower CG tax rate by deferring SS. There’s a lot to take into consideration when running the numbers.
There is another factor which I haven’t seen included – active old age. For those of us with enough money there isn’t a problem of running out of money.
Steve mentioned that his breakeven age for taking early payments was 88. For many, the extra money would be nicer to have at 80 rather than 90. I’ve observed that my relatives and in-laws slowed down considerably after age 90.
In many cases (most?) delaying allows you to spend more money in the early years because it reduces the chance of portfolio bust as you get older.
Ispouse started her benefit (which was slightly lower than mine) immediately upon retirement and I was going to take mine at age 70.
Now that the Fed is tightening and stocks are getting more affordable, I am looking at deploying some of my excess cash this year or next and also collecting SS this summer at FRA (66y, 4mos.) The plan is to start buying again when stocks are more affordable.