Wednesday, June 6, 2007

Securely taking Social Security

It surely is one of the most difficult and consequential of decisions for Baby Boomers: When can I retire and, more importantly, when should I start collecting my Social Security benefits.

Well, a writer at (of all places) has done some of the heavy lifting for us:

"Say you want to retire at 62 and would draw a Social Security benefit of $1,125 a month. That's 25 percent less than the $1,500 you would collect if you waited until age 66.

"By age 77 and 11 months (let's call it 78) you'd have collected roughly $216,000 in total benefits, whether you opted for early benefits ($1,125 x 192 months from ages 62 until 78) or full retirement age benefits ($1,500 x 144 months from ages 66 until 78).

"But your break-even age is actually later when you factor in the investment value of your early benefits. Even if you don't invest those early benefits directly, taking them might mean you can leave other savings to keep growing. That could add three to five years to your break-even point...."

She even linked to the Social Security Administration's breakeven calculator.

The full piece is here. It is worth your time.