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Jonathon, please, what type bond should I consider social security, short, long, etc. Or, is it more like an immediate fixed annuity and so forth. Thank You. Maybe somewhere in between,?
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I think of SS more like an immediate annuity with a cola. It’s immediate whenever I choose to take it, it’s been paid into over the course of my career, and it has a cost of living adjustment
I think Social Security is the best investment deal ever. No emotional input from us to change the investment or use the money for what seems important along the way. Of course, your choice as to taking it early means that you will get less money in the long term. After age 78, you reap the consequences of your choices (all things being equal) for the years afterward. I believe that waiting as long as possible, at least to full retirement age but age 70 is better, means that you will be better prepared for inflation during the years you cannot work. Mary Beth Franklin is worth reading.
Thanks for asking this question, Michael, SS is an important part of so many of our lives. And, Jonathan, thanks for your answer. I hadn’t really thought about how to think of SS in our plan. I just know it is important. Chris
Social Security is inflation-linked and government guaranteed, but it also has no principal value and payments are made for however long you (and perhaps your spouse) live. Thus, it’s similar to a laddered portfolio of inflation-indexed Treasurys, but not exactly the same. But I also wonder why you ask the question. Social Security is an inflation-indexed stream of lifetime income. Isn’t that all you need to know as you design the rest of your financial life?
Thank you, yes, that really is all I needed to know, certainly. I was just curious, and I appreciate your answer. Thanks agin.