A friend of mine- who retired early at age 60- is well off and does not really need the money from Social Security. So he plans to apply for SS and invest each monthly check in the stock and bond market and give the proceeds to his children at his death. The question is should he start collecting at age 62 or wait till 70 and get the largest monthly check.
For the sake of argument, he said he plans to live to age 90. So if he collected Social Security at age 62 he would collect 336 smaller monthly checks for 28 years. If he waited until 70 to collect SS he would collect 240 larger monthly checks for 20 years.
I found this was fascinating math and investing question. So I did some calculations from the historical stock market records. I used both a total stock market fund and a balanced mutual fund (Vanguard Wellington (VWELX) that has been in operation since the 1930s.
I assumed the "collect at age 62 monthly check" to be $2000 a month and a collect starting at age 70 check of $4000.00. Each would increase each year for inflation. My findings: There has never been a situation where someone would come out ahead in any starting point waiting till 70 to collect if they die at age 90 if they invested the ENTIRE CHECK in the stock market. Either with a total stock market fund or a balanced mutual fund. Check it out on this website:
https://www.portfoliovisualizer.com/backtest-portfolio#analysisResults
Submitted July 11, 2021 at 05:21AM by rarelywearamask https://ift.tt/36szasX
