Claiming SS Early vs Later (and Impact on growth if invested)
This question assumes you don't spend your Social Security payments (on expenses or whatever) and instead invest it. When determining the optimal ages to start Social Security, does PRC attempt to estimate the potential growth of dollars claimed and invested if claimed at an early age (say, 62) vs foregoing that growth by delaying claiming until a later age? Said another way, does PRC attempt to determine if it is it better to take a smaller benefit and invest it eight (or maybe less) years earlier...or...opt for (and also invest) the higher benefit eight years later? And comparing both options over the full modeling period (in our case 35 years)?
Yes, this is the way SS optimization works in Pralana Gold.
@smatthews51 and any adjustments based on projected lifespan (mortality tables)?
@nc-cpl The optimization is based on your projected lifespan, not mortality tables.
Always remember there's a lot more to this decision than the typical straight-forward break-even analysis and math. I've had clients who were in retirement or working part-time at 63-64 and living hand to mouth, and when I asked why they weren't collecting, they said they were told not to so they get bigger payments later. Some already had life-threatening medical conditions.
As well, many weren't aware of things like being able to collect spousal benefits even when subsequently married after the first marriage and then divorced or widowed, or that if they get their payments cut due to going over the $18,960 earnings test, they get that money back after they turn full retirement age (in the form of higher payments).
There's a lot to the SS decision, optimize it and don't leave money on the table!
Investment Advisor/Financial Counselor/Retirement Planner
Emancipare Investment Advisors LLC