Return Age
0% 79
1% 80
2% 82
3% 82
4% 84
5% 86
Age | Annual62 | BoY1 | Int1 | EOY1 | 0.02 | Annual70 | BoY2 | Int2 | EOY2 |
62 | 10000 | =B2 | =C2*$F$1 | =C2+D2 | |||||
=A2+1 | 10000 | =B3+E2 | =C3*$F$1 | =C3+D3 | |||||
=A3+1 | 10000 | =B4+E3 | =C4*$F$1 | =C4+D4 | |||||
=A4+1 | 10000 | =B5+E4 | =C5*$F$1 | =C5+D5 | |||||
=A5+1 | 10000 | =B6+E5 | =C6*$F$1 | =C6+D6 | |||||
=A6+1 | 10000 | =B7+E6 | =C7*$F$1 | =C7+D7 | |||||
=A7+1 | 10000 | =B8+E7 | =C8*$F$1 | =C8+D8 | |||||
=A8+1 | 10000 | =B9+E8 | =C9*$F$1 | =C9+D9 | |||||
=A9+1 | 10000 | =B10+E9 | =C10*$F$1 | =C10+D10 | =B10*(1.08)^(A10-A2) | =G10+J9 | =H10*$F$1 | =H10+I10 | |
=A10+1 | 10000 | =B11+E10 | =C11*$F$1 | =C11+D11 | =G10 | =G11+J10 | =H11*$F$1 | =H11+I11 | |
=A11+1 | 10000 | =B12+E11 | =C12*$F$1 | =C12+D12 | =G11 | =G12+J11 | =H12*$F$1 | =H12+I12 | |
=A12+1 | 10000 | =B13+E12 | =C13*$F$1 | =C13+D13 | =G12 | =G13+J12 | =H13*$F$1 | =H13+I13 | |
=A13+1 | 10000 | =B14+E13 | =C14*$F$1 | =C14+D14 | =G13 | =G14+J13 | =H14*$F$1 | =H14+I14 | |
=A14+1 | 10000 | =B15+E14 | =C15*$F$1 | =C15+D15 | =G14 | =G15+J14 | =H15*$F$1 | =H15+I15 | |
=A15+1 | 10000 | =B16+E15 | =C16*$F$1 | =C16+D16 | =G15 | =G16+J15 | =H16*$F$1 | =H16+I16 | |
=A16+1 | 10000 | =B17+E16 | =C17*$F$1 | =C17+D17 | =G16 | =G17+J16 | =H17*$F$1 | =H17+I17 | |
=A17+1 | 10000 | =B18+E17 | =C18*$F$1 | =C18+D18 | =G17 | =G18+J17 | =H18*$F$1 | =H18+I18 | |
=A18+1 | 10000 | =B19+E18 | =C19*$F$1 | =C19+D19 | =G18 | =G19+J18 | =H19*$F$1 | =H19+I19 | |
=A19+1 | 10000 | =B20+E19 | =C20*$F$1 | =C20+D20 | =G19 | =G20+J19 | =H20*$F$1 | =H20+I20 | |
=A20+1 | 10000 | =B21+E20 | =C21*$F$1 | =C21+D21 | =G20 | =G21+J20 | =H21*$F$1 | =H21+I21 | |
=A21+1 | 10000 | =B22+E21 | =C22*$F$1 | =C22+D22 | =G21 | =G22+J21 | =H22*$F$1 | =H22+I22 | |
=A22+1 | 10000 | =B23+E22 | =C23*$F$1 | =C23+D23 | =G22 | =G23+J22 | =H23*$F$1 | =H23+I23 | |
=A23+1 | 10000 | =B24+E23 | =C24*$F$1 | =C24+D24 | =G23 | =G24+J23 | =H24*$F$1 | =H24+I24 | |
=A24+1 | 10000 | =B25+E24 | =C25*$F$1 | =C25+D25 | =G24 | =G25+J24 | =H25*$F$1 | =H25+I25 | |
=A25+1 | 10000 | =B26+E25 | =C26*$F$1 | =C26+D26 | =G25 | =G26+J25 | =H26*$F$1 | =H26+I26 | |
=A26+1 | 10000 | =B27+E26 | =C27*$F$1 | =C27+D27 | =G26 | =G27+J26 | =H27*$F$1 | =H27+I27 | |
=A27+1 | 10000 | =B28+E27 | =C28*$F$1 | =C28+D28 | =G27 | =G28+J27 | =H28*$F$1 | =H28+I28 | |
=A28+1 | 10000 | =B29+E28 | =C29*$F$1 | =C29+D29 | =G28 | =G29+J28 | =H29*$F$1 | =H29+I29 | |
=A29+1 | 10000 | =B30+E29 | =C30*$F$1 | =C30+D30 | =G29 | =G30+J29 | =H30*$F$1 | =H30+I30 |
In the case of early retirement, a benefit is reduced 5/9 of one percent for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month.
For example, if the number of reduction months is 60 (the maximum number for retirement at 62 when normal retirement age is 67), then the benefit is reduced by 30 percent. This maximum reduction is calculated as 36 months times 5/9 of 1 percent plus 24 months times 5/12 of 1 percent.
And, with those changes, the crossover point for a 2% yield is 89-90. For a 4% yield, the crossover point is 99-100.
And, with those changes, the crossover point for a 2% yield is 89-90. For a 4% yield, the crossover point is 99-100.
Could you please clarify. So based on your adjustments to the calculations then if you get 2% yield on the money you start collecting early then it is best to start collecting at 62 if you stop collecting (die) by the age of 89-90.
And if you expect to get a 4% yield on the money you start collecting early then you should start collecting at 62 if you stop collecting (die) by the age of 99-100.
Is that correct?
And, with those changes, the crossover point for a 2% yield is 89-90. For a 4% yield, the crossover point is 99-100.
The main issue I see is the BOY and Int should be $0 for the first year of benefits (whether you are using 62 or 70). Since it takes a full year to get to $10,000 that should be the BOY balance for age 63 and the interest accrued should be credited starting that year. (It's not perfect to calculate the interest yearly, but in real life most of it would be accrued after the 63rd birthday for that first $10,000.)
And, with those changes, the crossover point for a 2% yield is 89-90. For a 4% yield, the crossover point is 99-100.Poorman & beltim, thanks for the double checks.
Return Age
0% 80
1% 81
2% 82
3% 84
4% 86
5% 90
Age | Monthly62 | BoY1 | EOY1 | 0.06 | Monthly70 | BoY2 | EOY2 |
62 | 1425 | 0 | =FV($E$1/12,12,-B2,-C2,1) | ||||
=A2+1 | =B2 | =D2 | =FV($E$1/12,12,-B3,-C3,1) | ||||
=A3+1 | =B3 | =D3 | =FV($E$1/12,12,-B4,-C4,1) | ||||
=A4+1 | =B4 | =D4 | =FV($E$1/12,12,-B5,-C5,1) | ||||
=A5+1 | =B5 | =D5 | =FV($E$1/12,12,-B6,-C6,1) | ||||
=A6+1 | =B6 | =D6 | =FV($E$1/12,12,-B7,-C7,1) | ||||
=A7+1 | =B7 | =D7 | =FV($E$1/12,12,-B8,-C8,1) | ||||
=A8+1 | =B8 | =D8 | =FV($E$1/12,12,-B9,-C9,1) | ||||
=A9+1 | =B9 | =D9 | =FV($E$1/12,12,-B10,-C10,1) | 2530 | 0 | =FV($E$1/12,12,-F10,-G10,1) | |
=A10+1 | =B10 | =D10 | =FV($E$1/12,12,-B11,-C11,1) | =F10 | =H10 | =FV($E$1/12,12,-F11,-G11,1) | |
=A11+1 | =B11 | =D11 | =FV($E$1/12,12,-B12,-C12,1) | =F11 | =H11 | =FV($E$1/12,12,-F12,-G12,1) | |
=A12+1 | =B12 | =D12 | =FV($E$1/12,12,-B13,-C13,1) | =F12 | =H12 | =FV($E$1/12,12,-F13,-G13,1) | |
=A13+1 | =B13 | =D13 | =FV($E$1/12,12,-B14,-C14,1) | =F13 | =H13 | =FV($E$1/12,12,-F14,-G14,1) | |
=A14+1 | =B14 | =D14 | =FV($E$1/12,12,-B15,-C15,1) | =F14 | =H14 | =FV($E$1/12,12,-F15,-G15,1) | |
=A15+1 | =B15 | =D15 | =FV($E$1/12,12,-B16,-C16,1) | =F15 | =H15 | =FV($E$1/12,12,-F16,-G16,1) | |
=A16+1 | =B16 | =D16 | =FV($E$1/12,12,-B17,-C17,1) | =F16 | =H16 | =FV($E$1/12,12,-F17,-G17,1) | |
=A17+1 | =B17 | =D17 | =FV($E$1/12,12,-B18,-C18,1) | =F17 | =H17 | =FV($E$1/12,12,-F18,-G18,1) | |
=A18+1 | =B18 | =D18 | =FV($E$1/12,12,-B19,-C19,1) | =F18 | =H18 | =FV($E$1/12,12,-F19,-G19,1) | |
=A19+1 | =B19 | =D19 | =FV($E$1/12,12,-B20,-C20,1) | =F19 | =H19 | =FV($E$1/12,12,-F20,-G20,1) | |
=A20+1 | =B20 | =D20 | =FV($E$1/12,12,-B21,-C21,1) | =F20 | =H20 | =FV($E$1/12,12,-F21,-G21,1) | |
=A21+1 | =B21 | =D21 | =FV($E$1/12,12,-B22,-C22,1) | =F21 | =H21 | =FV($E$1/12,12,-F22,-G22,1) | |
=A22+1 | =B22 | =D22 | =FV($E$1/12,12,-B23,-C23,1) | =F22 | =H22 | =FV($E$1/12,12,-F23,-G23,1) | |
=A23+1 | =B23 | =D23 | =FV($E$1/12,12,-B24,-C24,1) | =F23 | =H23 | =FV($E$1/12,12,-F24,-G24,1) | |
=A24+1 | =B24 | =D24 | =FV($E$1/12,12,-B25,-C25,1) | =F24 | =H24 | =FV($E$1/12,12,-F25,-G25,1) | |
=A25+1 | =B25 | =D25 | =FV($E$1/12,12,-B26,-C26,1) | =F25 | =H25 | =FV($E$1/12,12,-F26,-G26,1) | |
=A26+1 | =B26 | =D26 | =FV($E$1/12,12,-B27,-C27,1) | =F26 | =H26 | =FV($E$1/12,12,-F27,-G27,1) | |
=A27+1 | =B27 | =D27 | =FV($E$1/12,12,-B28,-C28,1) | =F27 | =H27 | =FV($E$1/12,12,-F28,-G28,1) | |
=A28+1 | =B28 | =D28 | =FV($E$1/12,12,-B29,-C29,1) | =F28 | =H28 | =FV($E$1/12,12,-F29,-G29,1) | |
=A29+1 | =B29 | =D29 | =FV($E$1/12,12,-B30,-C30,1) | =F29 | =H29 | =FV($E$1/12,12,-F30,-G30,1) | |
=A30+1 | =B30 | =D30 | =FV($E$1/12,12,-B31,-C31,1) | =F30 | =H30 | =FV($E$1/12,12,-F31,-G31,1) | |
=A31+1 | =B31 | =D31 | =FV($E$1/12,12,-B32,-C32,1) | =F31 | =H31 | =FV($E$1/12,12,-F32,-G32,1) | |
=A32+1 | =B32 | =D32 | =FV($E$1/12,12,-B33,-C33,1) | =F32 | =H32 | =FV($E$1/12,12,-F33,-G33,1) | |
=A33+1 | =B33 | =D33 | =FV($E$1/12,12,-B34,-C34,1) | =F33 | =H33 | =FV($E$1/12,12,-F34,-G34,1) | |
=A34+1 | =B34 | =D34 | =FV($E$1/12,12,-B35,-C35,1) | =F34 | =H34 | =FV($E$1/12,12,-F35,-G35,1) | |
=A35+1 | =B35 | =D35 | =FV($E$1/12,12,-B36,-C36,1) | =F35 | =H35 | =FV($E$1/12,12,-F36,-G36,1) |
The main issue I see is the BOY and Int should be $0 for the first year of benefits (whether you are using 62 or 70). Since it takes a full year to get to $10,000 that should be the BOY balance for age 63 and the interest accrued should be credited starting that year. (It's not perfect to calculate the interest yearly, but in real life most of it would be accrued after the 63rd birthday for that first $10,000.)And, with those changes, the crossover point for a 2% yield is 89-90. For a 4% yield, the crossover point is 99-100.Poorman & beltim, thanks for the double checks.
Rather than program the ssa.gov calculations for age 62 vs. 70, the calculations below use actual results from the ssa.gov website for one set of earnings and birth date: $1425/mo at age 62 and $2530/mo at age 70. Also, rather than do a quick 'n' dirty interest calculation the Excel FV function is used. Results are in between what the two of you posted, but closer to Poorman's. beltim, how do your calculations differ?
...taking Social Security early is always beneficial if you can earn a 7.4% return or greater, a number that is close to the long-term return of the market after inflation.
Couples can start to play optimization games if they wait until "full retirement" instead of taking early.
For example, I can take my spousal benefit from 67->70 and still get the fully inflated personal benefit @ 70. Her benefit won't be huge, so at 70 (after collecting on her own benefit from 67->70) she'll switch to getting a spousal benefit based on my record. Presuming I die first, my wife would have a fully inflated widow's benefit replace the spousal benefit when I die. *
Anyway, by following this approach, we get paid cash for 3 years, PLUS future benefits keep going up 8% a year.
If you try this before "full retirement" SSA will "deem" that you are also filing on your own benefit, and you won't see the growth - "excess benefit hell."
There are a LOT of complexities from optimizing social security. Even SSA staff don't know the right answer a lot of the time. Don't get burned.
*There are a couple more reasons to do it this way in my situation. My pension dies when I do, so as contingency planning this will leave my (presumed) widow with a bigger income. Also, my pension has no COLA, so it's shrinking all the time.