Quote:
Originally Posted by KC911
..... running the numbers ....
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For me, "full" retirement age is 66.5. Benefits are more than if I had started taking income at 62, and less than if I waited until 70. When running the numbers, you should consider all the income you would lose if you waited longer to get the higher monthly amount. Obviously. So....by the time I turn 70, I will have received $XXX,XXX.XX in income by starting payments at "full" retirement (age 66.5).
But lots of people fail to do the next step in math, which accounts for the time value of money. An interest rate should be used to bring that $XXX,XXX.XX to a 'present value' as of the last day of my 70th birthday month. This increases the mathematical and economic value of starting payments before age 70.
Then, of course, one would find the "break even point." The point at which, if one lives long enough, they will have received more money by waiting until 70 for the higher monthly amount. But again......the decision-maker should also consider the value of having the income at age 66.5, 67, 68 and 69.
In other words, the "beak even point" calculation is only one part of the analysis. In my view.
Also, when we turn 65 we MUST either sign up for Medicare or, alternatively, be covered under a private medical insurance policy that meets certain criteria. Failure to satisfy this requirement carries a financial penalty when you do sign up for Medicare after 65.