Could also depend on the market when making the decision. I have read about scenarios where there is a depressions or steep recession and your equity drops 30-40%+ In that moment...it COULD make sense to take SS to preserve as much of your investment to give them more time to bounce back.
I certainly understand your preference for more guaranteed income sources and sooner. This could like be a difference of preferences based on a reflections in our age differences. Well see if I hold the same sentiment as my wife and I enter our early 60's ...or whatever age we have to wait for our earliest potential access to SS when we get there. We are in our young 40's, so well see what changes happen to SS and US tax codes in the next 20 years lol.
I would argue SS is the most flexible option for "annuity" / guaranteed income for married people. Pensions / traditional annuities do not have the same flexibility or options...or if they do, have are far more expensive. It pays to understand the ins and out of social security survivor benefits and have someone to coach the surviving spouse IF they are not the financially savvy one in the relationship and/or a good death file to lays things out in a way the survivors spouses understands and trusts.
So...a few things to consider when looking at the nuance of all this. 1.) What is you expected REAL return in retirement on your investments? For me personally..I am planning on 4.25% REAL return on an 65/35 portfolio but have considered investing more aggressively post retirement up to an 80/20 mix in which I am planning on a 4.5% REAL return. So 5.3%+ plus risk free (and state tax free sounds great). Also, 5.3% is better than most IRR for annuity contracts. And just try to get an inflation rider on an annuity...ouch lol....the upcharge rarely makes sense.2.) Does a bigger social security payment ENABLE you to take more risk with your investment? As we age, we slowly age past sequence of return risks (they never go away but they reduce). So as long as there isn't a big market meltdown between age 62 and 70 (or 67 and 70), you can let your social security benefit grow and age age 70....you have a large piece of your monthly expenses coming in risk free. You COULD thus, choose a more aggressive investment mix. To what end? Maybe leaving more to the kids/grandkids or helping them out more now, improving quality of life while you are around, or just extra padding for long term care. That is, if you can sleep and stomach the ups and downs. I can now but I am 41...no idea what will be my personal sentiment or preference at 70 though. 3.) This is the BIG one.....it is EXTRA value able for a married person who is the higher earner. The author addressed the odds of death/break even as 83/84 which may sound like a stretch for 1 person. It is not for 2 people though. JOINT life expectancy for a married couple at 62 is 29 years...which would bring you to 91. At 67 it is 24.4 years which brings us to 91.4. For just women....at age 62 the joint life expectancy is 22....bring the female spouse to 84, the break even point for delaying to make financial sense. So, if at very LEAST the female spouse has average to better than average health, the odds are in the favor of the higher earner (male or female) to wait til 70. It will be the most affordable annuity the surviving spouse could get. 3.) The 5.3% is ever so slightly higher considering MOST states do not tax social security and on a federal level, 15% is not taxed *unless you you have very very low taxable income). Does this change the sentiment of the article or the master equation a ton...no...but every little bit helps. 4.) Also...helps with Roth conversions and tax bracket efficiency. Why...because the expenses of 2 people are not MUCH more than the expenses of one person. If 1 person can live off 50k, it is likely 2 can live off of 65-80k (or less). Property tax stays the same, less likely to need at home care, less food waste, little to no additional car insurance, gas money, electricity or gas. BUT with 2 people on your taxes, you get 2x the standard deduction and your brackets are higher. THEN...if one spouses passes....which save SOME money in monthly expenses, but not a ton on taxes, the surviving spouse will have more Roth funds (yay, no income tax) and a higher SS payment which they do no pay state tax on AND pay slightly less federal tax on. 5.) Surviving spouse. Lets say BOTH spouses claim at 62...at 65 the husband dies...the surviving spouse can claim the higher of the 2 payments. BUT...if the lower earner claims at 62 and the other spouse does not...then dies at 65...the PIA is locked in...the survivor can KEEP getting their benefits that started at 62 and at age 70 SWITCH to the increased benefit of the deceased higher earner. This is HUGE. It is the best of both worlds (not to undermine the pain of losing a spouse). Moral....I wouldn't let 5.3% vs. 8% deter you as there are many other reasons (financial and personal) to lock in a higher annuity/social security payment, the main on being....for the surviving spouse. Is this for everyone? NO.....if you are single and can afford to claim early....it is especially logical if you are male, or have personal/family history that suggest you may have a below average life expectancy. If you have to unexpectedly retire early due to health....it makes sense. If the market crashes and you want to minimize what you pull from investments to give your investments more time to come back...it can make sense. In general.....if you are married, OR female/single with average to above health OR single/male with above average health....it will likely make more sense to keep waiting.
Great share Mark. Very interesting to see the spending of the 250k-750k cohort drop 32% from age 60 to 95+ and the spending of the 1M-3M cohort drop 26% in the same time interval (age 60-95). Makes perfect sense to me that HOW much your spending drops is based on how much you start with. Start with less...expect steeper reductions in spending. Also of interest to note are a few drop-off points. The wealthier cohort MAYBE had a few extra years of some travel expenses but otherwise, it really looks like both cohorts drop off with discretionary spending around age 80 (little travel, clothes, entertainment, transportation). It also looks like there is a sizable reduction in food for both cohorts between ages 65 and 80....I would assume this is because of increased difficulty traveling to a restaurant and reduced eating out options because of medically necessary diets. That, and I have heard appetites reduced with age.
First and foremost....nothing is perfect. Many ways to address inflation involve incurring extra risk. My overall plan is to NOT go all in on anyone solution. So here is what I am doing to combat inflation: 1) Don't assume level spending in retirement. I very much call B-S on the oversimplified mantra of "use 80% of your take home pay before retirement" or any amount of spending before retirement....70%...90%...110%...I dont care....life doesnt work that way. I break up retirement into buckets for spending. They project what our spending will most likely look like. A few categories like healthcare, have VERY high increases from one phase to the next. Then there are categories with modest increases like food, utilities, automotive and family spending (spending on our kids or grandkids). Then everything else stays relatively the same (assuming real costs...not inflation adjusted). What we see....medical cost rise FASTER than our travel and entertainment costs slow down. Also food and fmaily entertainment costs go up with grandchildren as you mentioned. Healthcare is the biggest X factor....we plan for 1% increase in all healthcare categories ABOVE inflation each year. THAT REALLY ads up by time we get to retirement....AND gets VERY VERY big by time we hit end of life (estimated at age 97). So Medigap policies compound up....out of pocket compounds up....unreimbursed medical expenses, premiums and all that other added in stuff. Phase 1: retirement to age 62 (when I will take SS and medicare MIGHT kick in). The travel/adventure years (go-go-go years). We have extra travel baked into this, higher health care costs Phase 2: age 62 - 68 - Less travel, more medical costs, way more food and family spending as we may have grandkids around here. Healthy entertainment budget still...this is still our Go-Go phase. Higher medical than phase 1. Phase 3: 68-78. Slow-Go phase. Less travel, a little less entertainment/eating out. A little more grandkid spending. Higher medical than phase 2. Auto drops a little as we move to one car and drive less. Phase 4: 78-85: Slow-go/no-go. Planning for 2 spouses but much less travel and a bit less entertainment. Grandkids' costs start to reduce. Medical is higher. Extra support (grocery delivery/home cleaner) enters the budget. Phase 5: No-go / 1 remaining spouse. Statistically, its unlikely well both be around (I have some health issues....so 85 is a little generous for me). Grandkid costs are heavily reduced, all variable expenses are reduced. Overall health is reduced because 1 person vs 2...but my wife's share will be more. Driving less. More paid support. Our most expensive phase...phase 2....travel...healthcare....grandkids...then they slowly reduce each phase and then they go down a lot when I pass at project 85 or sooner. Medical ALWAYS goes up though...by a lot. 2) Wait til 70 for the higher earner for SS. Honestly...we are planning for SS age to get bumped back to 73...but this will help us hedge inflation. 3.) Will have an unadjusted annuity (QLAC) for my wife which starts at 80. Between SS and this annuity....80% of her NEEDS will be met from 80-90 roughly. 4.) What about the spending gap for 90 and on...we have our Roth investments for that. We will have a multi-legged stool...investments in the roth with a 75/25 or 85/15 mix (torn on that still). This IS aggressive for a fixed income couple but we also have a large SS from my wife at age 70 (73), my SS and an annuity starting at 80. THIS PIECE....is our BIGGEST protection from inflation in my opinion. 5.) What about SORR - from retirement - 70...one of us could consult or work aprt time if we had a MAJOR meltdown. 6.) Also...we are planning to keep working part-time for 1-3 year PAST when we can retire for extra buffer/travel money. If a market meltdown happens just before we go part-time or during our 1-3 years of part-time work....we can just keep working to keep withdrawals lower during the down years (health permitting of course). We work desk jobs remotely now....but are open to more physical work like being a barista or airline/hotel desk clerk (for the extra travel perks)...health permitting of course. 7.) And if inflation rises above of our investments....simple...we cut back on the wants. We are pretty good at enjoying the simple things....so while big European vacations and eating out is fun and fancy...we can be very happy with a long weekend road trip staying at a hotel we paid with credit card points, packing a lunch from our hotel room and cooking at home when in town. The gets a little trickier in our later phases as we age as there is less budgeted for those things....but also...we also may have less concern of longevity risks in the later years as well (again...I have some health issues....wife may live to 105 though lol). 8.) We dont aim to die with 0 at 97....nor do we aim to live off pure interest or the 4% rule. We aim to have enough at age 97 to be worth about 40% of our starting networth. We can tap this for NEEDED spend (not wants) earlier if we need, or long term care....or longevity insurance (incase I live past 85 or my wife lives past 97). Otherwise...our kids/grandkids will inherit it. 9.) HELOC/Reverse Mortgage - we make NO plans for our home equity...so this is an additional fall back. 10.) Consider moving to medicare advantage from Medigap after I pass. Is it ideal? Not in a million years. BUT if it comes down to risking retiring 3-5 years later to ensure we ALWAYS have medigap and having a high risk of not enjoying ANY retirement.....or having a LAST RESORT of dropping from Medigap to Medicare advantage at age 88-97....we decided to take the later. That is a VERY personal call...especially considering Medigap is MOST beneficial over advantage in the later phases of life when you would use healthcare MORE. But for us...we are less likely to travel out of state for top care or even travel 1-3 hours away for care in our later years. That is one of the large medigap benefits wed want. So that become a mute point. 11.) I would 100% get a roommate if my wife unexpectedly passed. So this would give me a little extra cash, but more importantly, more social interaction and purpose. 12.) We are considering buying a 2 unit home to live in for retirement. Live in one unit rent the other....sell when we hit 75 or too old to maintain it. This could also offer a little inflation protection .
The bigger analysis should be of your personal health. I would go as far to overcomplicate it significantly.....but just make the call...do you have above average health, average, or below average? I forget where I pulled this from, but the standard deviation on US SSA life expectancy is about 8 years. Let's say you adjust 1/2 a standard deviation for below average or above average health, so 4 years. At 62, average female life expectancy is 84, male is 81. Run the numbers with an adjustment. Men in poor health, when is the ideal break-even point if you die at 77? Women, in poor health, 80. Above average health ...men...85, women 89. It will likely work out, that you should wait until 70 for the higher earner. And never forget the odds of 1 of 2 people dying are far higher than the odds of 1 person dying. Meaning for couples, the lower earner should consider taking it at 62 unless both spouses are in very above average health and/or still working and earning over the exempted amount (22.1k I believe).
I agree with this....the breakeven numbers don't matter for the person themselves...but for the surviving spouse and/or estate. That said...you shouldn't put yourself at financial risk for your estate but many poeple have very good reasons to believe that overwhelmingly, they may not be here in 10 years. So yes, "run the damn numbers" lol. Breakeven on SS is not a worthless analysis.
You could but I believe deciding when to start taking SSI is more nuanced. I am not saying either is "the optimal choice" but rather there are multiple scenarios to consider. Usually...pulling from investments makes sense....but as always, there are exceptions and varing levels of different risks for folks. If you are married...the odds that one spouse will pass are much higher, so it makes sense for the lower earner to take earlier. Most people on this forum are keen to this and if you are part of a couple....almost always makes sense for one spouse to start a 62 unless both spouses are still working and earnings would reducing your SS payment. Next is the market. And yes, I am going to put in a little piece about "market timing". IF your portfolio went down or pulled back significantly before when it comes time to decide to take SS or not / stop working...it could make more sense to take SSI and let your portfolio bounce back more. Drawing down your nest egg early in retirement increases SORR risk....so if you take SS earlier because of an early pull back...your making the bet (or market timing) that the next decade or few decades will have a higher inflation adjusted return AT your current risk level based on your CURRENT asset mix than 6-8% the SS increases by annually. In my opinion....its an aggressive bet if things only went down say 20%....but if they dropped 40% or more....its a bet I may personally make. For example, the 10 years AFTER 2008 when the market dropped about 37% in 1 year, (2009-2018) had the following inflation-adjusted compound annual growth rates: 100% US stock market: 4.07%
75% US stock market/25% 10-year TBills: 8.67%
65% US stock market / 35% 10-year Tbills: 7.65%
Inflation-adjusted CAGR of your monthly payment at age 70 versus 62 and 1 month is 7.412% If we took another time cohort and longer post-bear market time frame...we could see it work the other way. 20 Years after 2000 (2001-2019) had the following inflation-adjusted CAGR: 100% US stock market: 4.07%
75% US stock market/25% 10-year TBills: 4.41%
65% US stock market / 35% 10-year Tbills: 4.41%
Inflation-adjusted CAGR of your monthly payment at age 70 versus 62 and 1 month is 7.412% So while an AGGRESSIVE bet...I don't think it is a completely illogical bet. The likelihood of 2 large bear markets in the same decade is on the lower side. I'm not sure I WOULD PERSONALLY make that bet, but I get those taht do. Also...mentally...I can't imagine retiring in early 2009 after seeing such a large dip. Taking SS then could help you make that decision. Of course, some people could opt to work an extra year or two....but not everyone physically has that option. Especially if you expect to have a below-average lifespan. Last...if you have reason to believe you'll have a below-average lifespan AND want to leave as much as possible to your estate. If you are mediocre to poor health now, have a family history of early deaths or are in sub sections of the population with lower life spans (obese, smoker, drinker and so on). Of course you have to be careful and manage risk. If your barely covering expenses the longevity risk could be very high. If your biggest risk is a reduction in discretionary spending if you end up having an above average lifespan...you can consider this.
We are young and have some time until our intended retirement around 58-62 years old (we are both 41 now). But yes...this whole wild ride of 2025 made me consider a little more diversification. We WERE:
40% Large Cap Blend (my wifes Roth 401k portfolio), she has horrible fees on just about every other investment available to her in this 401k.
60% The mix below: Roth IRA Mix:
75% Large Cap Growth
8% Speculative ETFs and a couple stocks. Mostly sector ETF's in nuclear power, Chinese tech, Chinese clean energy, data security, and (2) 1% of my networth positions in 2 companies I research and believe in, Reddit and Oklo.
10% Mid Cap Value
5% Small Cap Value.
2% Gold. It was a pretty aggressive portfolio, but it was comfortable for us, seeing that when you zoom out...its basically a large cap fund with a strong growth tilt and a few smaller side bets. BUT then 2025 lol. I made the mistake of market timing (and I KNOW better) and sold off my individual ETFs and a third of my large cap growth etf in my Roth. Bought 1/2 gold and kept cash. Worked out really well for a month....shouldnt have been so greedy or better yet....should have left it ALONE lol. Still sitting on a big chunk of cash and gold. The gold is still up so at least there is that....but not nearly as up as the market over the last month. Egg on my face. The reason I have not bought back in..... have been contemplating a SLIGHTLY more diverse and my overly excessive analysis and HOPE that markets pull back a hair has kept me on the side line the last week to week and a half. The new mix 40% Large Cap Blend in wife's Roth 401k at her active employer
60% Rother IRAs Roth Blend: 55% Large Cap Growth
12% Large Cap Value / Dividend ETFs
8% Mid Cap Value
4% Small Cap Value
6% International USD Hedged ETF
4% Other International ETFs
3% Gold
1% Long Term US Gov Bond ETF
3% Global USD Hedged Bond ETF
4% Sector funds and small bets. Rebalance yearly in July. Still aggressive lol....but we are young....and a little more spread out.
Comments
Could also depend on the market when making the decision. I have read about scenarios where there is a depressions or steep recession and your equity drops 30-40%+ In that moment...it COULD make sense to take SS to preserve as much of your investment to give them more time to bounce back.
Post: THE REAL RETURN ON DELAYING SOCIAL SECURITY
Link to comment from November 14, 2025
I certainly understand your preference for more guaranteed income sources and sooner. This could like be a difference of preferences based on a reflections in our age differences. Well see if I hold the same sentiment as my wife and I enter our early 60's ...or whatever age we have to wait for our earliest potential access to SS when we get there. We are in our young 40's, so well see what changes happen to SS and US tax codes in the next 20 years lol.
Post: THE REAL RETURN ON DELAYING SOCIAL SECURITY
Link to comment from November 14, 2025
I would argue SS is the most flexible option for "annuity" / guaranteed income for married people. Pensions / traditional annuities do not have the same flexibility or options...or if they do, have are far more expensive. It pays to understand the ins and out of social security survivor benefits and have someone to coach the surviving spouse IF they are not the financially savvy one in the relationship and/or a good death file to lays things out in a way the survivors spouses understands and trusts.
Post: THE REAL RETURN ON DELAYING SOCIAL SECURITY
Link to comment from November 14, 2025
So...a few things to consider when looking at the nuance of all this. 1.) What is you expected REAL return in retirement on your investments? For me personally..I am planning on 4.25% REAL return on an 65/35 portfolio but have considered investing more aggressively post retirement up to an 80/20 mix in which I am planning on a 4.5% REAL return. So 5.3%+ plus risk free (and state tax free sounds great). Also, 5.3% is better than most IRR for annuity contracts. And just try to get an inflation rider on an annuity...ouch lol....the upcharge rarely makes sense. 2.) Does a bigger social security payment ENABLE you to take more risk with your investment? As we age, we slowly age past sequence of return risks (they never go away but they reduce). So as long as there isn't a big market meltdown between age 62 and 70 (or 67 and 70), you can let your social security benefit grow and age age 70....you have a large piece of your monthly expenses coming in risk free. You COULD thus, choose a more aggressive investment mix. To what end? Maybe leaving more to the kids/grandkids or helping them out more now, improving quality of life while you are around, or just extra padding for long term care. That is, if you can sleep and stomach the ups and downs. I can now but I am 41...no idea what will be my personal sentiment or preference at 70 though. 3.) This is the BIG one.....it is EXTRA value able for a married person who is the higher earner. The author addressed the odds of death/break even as 83/84 which may sound like a stretch for 1 person. It is not for 2 people though. JOINT life expectancy for a married couple at 62 is 29 years...which would bring you to 91. At 67 it is 24.4 years which brings us to 91.4. For just women....at age 62 the joint life expectancy is 22....bring the female spouse to 84, the break even point for delaying to make financial sense. So, if at very LEAST the female spouse has average to better than average health, the odds are in the favor of the higher earner (male or female) to wait til 70. It will be the most affordable annuity the surviving spouse could get. 3.) The 5.3% is ever so slightly higher considering MOST states do not tax social security and on a federal level, 15% is not taxed *unless you you have very very low taxable income). Does this change the sentiment of the article or the master equation a ton...no...but every little bit helps. 4.) Also...helps with Roth conversions and tax bracket efficiency. Why...because the expenses of 2 people are not MUCH more than the expenses of one person. If 1 person can live off 50k, it is likely 2 can live off of 65-80k (or less). Property tax stays the same, less likely to need at home care, less food waste, little to no additional car insurance, gas money, electricity or gas. BUT with 2 people on your taxes, you get 2x the standard deduction and your brackets are higher. THEN...if one spouses passes....which save SOME money in monthly expenses, but not a ton on taxes, the surviving spouse will have more Roth funds (yay, no income tax) and a higher SS payment which they do no pay state tax on AND pay slightly less federal tax on. 5.) Surviving spouse. Lets say BOTH spouses claim at 62...at 65 the husband dies...the surviving spouse can claim the higher of the 2 payments. BUT...if the lower earner claims at 62 and the other spouse does not...then dies at 65...the PIA is locked in...the survivor can KEEP getting their benefits that started at 62 and at age 70 SWITCH to the increased benefit of the deceased higher earner. This is HUGE. It is the best of both worlds (not to undermine the pain of losing a spouse). Moral....I wouldn't let 5.3% vs. 8% deter you as there are many other reasons (financial and personal) to lock in a higher annuity/social security payment, the main on being....for the surviving spouse. Is this for everyone? NO.....if you are single and can afford to claim early....it is especially logical if you are male, or have personal/family history that suggest you may have a below average life expectancy. If you have to unexpectedly retire early due to health....it makes sense. If the market crashes and you want to minimize what you pull from investments to give your investments more time to come back...it can make sense. In general.....if you are married, OR female/single with average to above health OR single/male with above average health....it will likely make more sense to keep waiting.
Post: THE REAL RETURN ON DELAYING SOCIAL SECURITY
Link to comment from November 14, 2025
Great share Mark. Very interesting to see the spending of the 250k-750k cohort drop 32% from age 60 to 95+ and the spending of the 1M-3M cohort drop 26% in the same time interval (age 60-95). Makes perfect sense to me that HOW much your spending drops is based on how much you start with. Start with less...expect steeper reductions in spending. Also of interest to note are a few drop-off points. The wealthier cohort MAYBE had a few extra years of some travel expenses but otherwise, it really looks like both cohorts drop off with discretionary spending around age 80 (little travel, clothes, entertainment, transportation). It also looks like there is a sizable reduction in food for both cohorts between ages 65 and 80....I would assume this is because of increased difficulty traveling to a restaurant and reduced eating out options because of medically necessary diets. That, and I have heard appetites reduced with age.
Post: Is 4.7% the New 4% Safe Withdrawal Rate
Link to comment from August 18, 2025
First and foremost....nothing is perfect. Many ways to address inflation involve incurring extra risk. My overall plan is to NOT go all in on anyone solution. So here is what I am doing to combat inflation: 1) Don't assume level spending in retirement. I very much call B-S on the oversimplified mantra of "use 80% of your take home pay before retirement" or any amount of spending before retirement....70%...90%...110%...I dont care....life doesnt work that way. I break up retirement into buckets for spending. They project what our spending will most likely look like. A few categories like healthcare, have VERY high increases from one phase to the next. Then there are categories with modest increases like food, utilities, automotive and family spending (spending on our kids or grandkids). Then everything else stays relatively the same (assuming real costs...not inflation adjusted). What we see....medical cost rise FASTER than our travel and entertainment costs slow down. Also food and fmaily entertainment costs go up with grandchildren as you mentioned. Healthcare is the biggest X factor....we plan for 1% increase in all healthcare categories ABOVE inflation each year. THAT REALLY ads up by time we get to retirement....AND gets VERY VERY big by time we hit end of life (estimated at age 97). So Medigap policies compound up....out of pocket compounds up....unreimbursed medical expenses, premiums and all that other added in stuff. Phase 1: retirement to age 62 (when I will take SS and medicare MIGHT kick in). The travel/adventure years (go-go-go years). We have extra travel baked into this, higher health care costs Phase 2: age 62 - 68 - Less travel, more medical costs, way more food and family spending as we may have grandkids around here. Healthy entertainment budget still...this is still our Go-Go phase. Higher medical than phase 1. Phase 3: 68-78. Slow-Go phase. Less travel, a little less entertainment/eating out. A little more grandkid spending. Higher medical than phase 2. Auto drops a little as we move to one car and drive less. Phase 4: 78-85: Slow-go/no-go. Planning for 2 spouses but much less travel and a bit less entertainment. Grandkids' costs start to reduce. Medical is higher. Extra support (grocery delivery/home cleaner) enters the budget. Phase 5: No-go / 1 remaining spouse. Statistically, its unlikely well both be around (I have some health issues....so 85 is a little generous for me). Grandkid costs are heavily reduced, all variable expenses are reduced. Overall health is reduced because 1 person vs 2...but my wife's share will be more. Driving less. More paid support. Our most expensive phase...phase 2....travel...healthcare....grandkids...then they slowly reduce each phase and then they go down a lot when I pass at project 85 or sooner. Medical ALWAYS goes up though...by a lot. 2) Wait til 70 for the higher earner for SS. Honestly...we are planning for SS age to get bumped back to 73...but this will help us hedge inflation. 3.) Will have an unadjusted annuity (QLAC) for my wife which starts at 80. Between SS and this annuity....80% of her NEEDS will be met from 80-90 roughly. 4.) What about the spending gap for 90 and on...we have our Roth investments for that. We will have a multi-legged stool...investments in the roth with a 75/25 or 85/15 mix (torn on that still). This IS aggressive for a fixed income couple but we also have a large SS from my wife at age 70 (73), my SS and an annuity starting at 80. THIS PIECE....is our BIGGEST protection from inflation in my opinion. 5.) What about SORR - from retirement - 70...one of us could consult or work aprt time if we had a MAJOR meltdown. 6.) Also...we are planning to keep working part-time for 1-3 year PAST when we can retire for extra buffer/travel money. If a market meltdown happens just before we go part-time or during our 1-3 years of part-time work....we can just keep working to keep withdrawals lower during the down years (health permitting of course). We work desk jobs remotely now....but are open to more physical work like being a barista or airline/hotel desk clerk (for the extra travel perks)...health permitting of course. 7.) And if inflation rises above of our investments....simple...we cut back on the wants. We are pretty good at enjoying the simple things....so while big European vacations and eating out is fun and fancy...we can be very happy with a long weekend road trip staying at a hotel we paid with credit card points, packing a lunch from our hotel room and cooking at home when in town. The gets a little trickier in our later phases as we age as there is less budgeted for those things....but also...we also may have less concern of longevity risks in the later years as well (again...I have some health issues....wife may live to 105 though lol). 8.) We dont aim to die with 0 at 97....nor do we aim to live off pure interest or the 4% rule. We aim to have enough at age 97 to be worth about 40% of our starting networth. We can tap this for NEEDED spend (not wants) earlier if we need, or long term care....or longevity insurance (incase I live past 85 or my wife lives past 97). Otherwise...our kids/grandkids will inherit it. 9.) HELOC/Reverse Mortgage - we make NO plans for our home equity...so this is an additional fall back. 10.) Consider moving to medicare advantage from Medigap after I pass. Is it ideal? Not in a million years. BUT if it comes down to risking retiring 3-5 years later to ensure we ALWAYS have medigap and having a high risk of not enjoying ANY retirement.....or having a LAST RESORT of dropping from Medigap to Medicare advantage at age 88-97....we decided to take the later. That is a VERY personal call...especially considering Medigap is MOST beneficial over advantage in the later phases of life when you would use healthcare MORE. But for us...we are less likely to travel out of state for top care or even travel 1-3 hours away for care in our later years. That is one of the large medigap benefits wed want. So that become a mute point. 11.) I would 100% get a roommate if my wife unexpectedly passed. So this would give me a little extra cash, but more importantly, more social interaction and purpose. 12.) We are considering buying a 2 unit home to live in for retirement. Live in one unit rent the other....sell when we hit 75 or too old to maintain it. This could also offer a little inflation protection .
Post: How are you dealing with or plan to deal with inflation in retirement?
Link to comment from June 12, 2025
The bigger analysis should be of your personal health. I would go as far to overcomplicate it significantly.....but just make the call...do you have above average health, average, or below average? I forget where I pulled this from, but the standard deviation on US SSA life expectancy is about 8 years. Let's say you adjust 1/2 a standard deviation for below average or above average health, so 4 years. At 62, average female life expectancy is 84, male is 81. Run the numbers with an adjustment. Men in poor health, when is the ideal break-even point if you die at 77? Women, in poor health, 80. Above average health ...men...85, women 89. It will likely work out, that you should wait until 70 for the higher earner. And never forget the odds of 1 of 2 people dying are far higher than the odds of 1 person dying. Meaning for couples, the lower earner should consider taking it at 62 unless both spouses are in very above average health and/or still working and earning over the exempted amount (22.1k I believe).
Post: Breaking even? Why should anyone care? I don’t
Link to comment from May 15, 2025
I agree with this....the breakeven numbers don't matter for the person themselves...but for the surviving spouse and/or estate. That said...you shouldn't put yourself at financial risk for your estate but many poeple have very good reasons to believe that overwhelmingly, they may not be here in 10 years. So yes, "run the damn numbers" lol. Breakeven on SS is not a worthless analysis.
Post: Breaking even? Why should anyone care? I don’t
Link to comment from May 15, 2025
You could but I believe deciding when to start taking SSI is more nuanced. I am not saying either is "the optimal choice" but rather there are multiple scenarios to consider. Usually...pulling from investments makes sense....but as always, there are exceptions and varing levels of different risks for folks. If you are married...the odds that one spouse will pass are much higher, so it makes sense for the lower earner to take earlier. Most people on this forum are keen to this and if you are part of a couple....almost always makes sense for one spouse to start a 62 unless both spouses are still working and earnings would reducing your SS payment. Next is the market. And yes, I am going to put in a little piece about "market timing". IF your portfolio went down or pulled back significantly before when it comes time to decide to take SS or not / stop working...it could make more sense to take SSI and let your portfolio bounce back more. Drawing down your nest egg early in retirement increases SORR risk....so if you take SS earlier because of an early pull back...your making the bet (or market timing) that the next decade or few decades will have a higher inflation adjusted return AT your current risk level based on your CURRENT asset mix than 6-8% the SS increases by annually. In my opinion....its an aggressive bet if things only went down say 20%....but if they dropped 40% or more....its a bet I may personally make. For example, the 10 years AFTER 2008 when the market dropped about 37% in 1 year, (2009-2018) had the following inflation-adjusted compound annual growth rates: 100% US stock market: 4.07% 75% US stock market/25% 10-year TBills: 8.67% 65% US stock market / 35% 10-year Tbills: 7.65% Inflation-adjusted CAGR of your monthly payment at age 70 versus 62 and 1 month is 7.412% If we took another time cohort and longer post-bear market time frame...we could see it work the other way. 20 Years after 2000 (2001-2019) had the following inflation-adjusted CAGR: 100% US stock market: 4.07% 75% US stock market/25% 10-year TBills: 4.41% 65% US stock market / 35% 10-year Tbills: 4.41% Inflation-adjusted CAGR of your monthly payment at age 70 versus 62 and 1 month is 7.412% So while an AGGRESSIVE bet...I don't think it is a completely illogical bet. The likelihood of 2 large bear markets in the same decade is on the lower side. I'm not sure I WOULD PERSONALLY make that bet, but I get those taht do. Also...mentally...I can't imagine retiring in early 2009 after seeing such a large dip. Taking SS then could help you make that decision. Of course, some people could opt to work an extra year or two....but not everyone physically has that option. Especially if you expect to have a below-average lifespan. Last...if you have reason to believe you'll have a below-average lifespan AND want to leave as much as possible to your estate. If you are mediocre to poor health now, have a family history of early deaths or are in sub sections of the population with lower life spans (obese, smoker, drinker and so on). Of course you have to be careful and manage risk. If your barely covering expenses the longevity risk could be very high. If your biggest risk is a reduction in discretionary spending if you end up having an above average lifespan...you can consider this.
Post: Breaking even? Why should anyone care? I don’t
Link to comment from May 15, 2025
We are young and have some time until our intended retirement around 58-62 years old (we are both 41 now). But yes...this whole wild ride of 2025 made me consider a little more diversification. We WERE: 40% Large Cap Blend (my wifes Roth 401k portfolio), she has horrible fees on just about every other investment available to her in this 401k. 60% The mix below: Roth IRA Mix: 75% Large Cap Growth 8% Speculative ETFs and a couple stocks. Mostly sector ETF's in nuclear power, Chinese tech, Chinese clean energy, data security, and (2) 1% of my networth positions in 2 companies I research and believe in, Reddit and Oklo. 10% Mid Cap Value 5% Small Cap Value. 2% Gold. It was a pretty aggressive portfolio, but it was comfortable for us, seeing that when you zoom out...its basically a large cap fund with a strong growth tilt and a few smaller side bets. BUT then 2025 lol. I made the mistake of market timing (and I KNOW better) and sold off my individual ETFs and a third of my large cap growth etf in my Roth. Bought 1/2 gold and kept cash. Worked out really well for a month....shouldnt have been so greedy or better yet....should have left it ALONE lol. Still sitting on a big chunk of cash and gold. The gold is still up so at least there is that....but not nearly as up as the market over the last month. Egg on my face. The reason I have not bought back in..... have been contemplating a SLIGHTLY more diverse and my overly excessive analysis and HOPE that markets pull back a hair has kept me on the side line the last week to week and a half. The new mix 40% Large Cap Blend in wife's Roth 401k at her active employer 60% Rother IRAs Roth Blend: 55% Large Cap Growth 12% Large Cap Value / Dividend ETFs 8% Mid Cap Value 4% Small Cap Value 6% International USD Hedged ETF 4% Other International ETFs 3% Gold 1% Long Term US Gov Bond ETF 3% Global USD Hedged Bond ETF 4% Sector funds and small bets. Rebalance yearly in July. Still aggressive lol....but we are young....and a little more spread out.
Post: Ch-Ch-Changes?
Link to comment from May 14, 2025