David (Targa911s) mentioned in his birthday thread that he's 62 and is going to start collecting SS next month. My BIL hit 62 a few months ago and got a good union pension and began collecting SS as well. So I got to thinking when best to start collecting it. I will "retire" in about 5 years when I hit age 64.
My SS in today's dollars would be as follows:
Age 62-$1,869/mo or $22,408/year
Age 66-$2,576/mo or $30,916/year
Age 70-$3,462/mo or $41,544/year
Assuming I live to be 80 (who knows, lifestyle doesn't predict much more, but anyway). I used this Net Present Value Calculator
Present Value Calculator
assuming 2% Cost of Living adjustment. Also, it assumes that SS doesn't change, they don't "means test" me, etc.
I get the following NPVs:
Retire at 62- $358,xxx
Retire at 64-$326,xxx
Retire at 66- $405,xxx
Retire at 70-$414,xxx
It seems odd, but my NPV would be higher retiring at 62 rather than 64, because I'd get two years more of SS payments from age 62 to age 64 at the lower benefit range. $1,869/mo if I retire at either 62 or 64. That is kind of academic since to get the most out of my employer's pension funds, I really need to retire at 64 anyway.
If you don't need the money, Like my BIL, who has a nice comfortable pension, it makes more sense, to me at least, to retire at 64, but not apply for SS until age 66. I'd get a net present value of about $80K more up until age 80.
Thoughts?