Tough financial choices

| August 04, 2009

Also consider that $50,400 taken in early Social Security could be placed in your Individual Retirement Account to gain interest. Assuming a modest 5 percent rate of return, over four years that amounts to $10,862 in potential income missed by taking Social Security benefits at full retirement age. But that only moves the “break-even” point between early and full retirement out about two and a half years, to 81. That happens to be the average male life expectancy, according to the Social Security Administration. For women, it’s 84.

If you’re healthy and can continue working, it’s probably best to wait. “It isn’t a hard and fast rule,” says ATBS’ Miller. “It’s a personal value decision.” Balancing your needs with those of your spouse, as well as evaluating your life expectancy, will likewise figure into your decision.

In the January 2008 issue of Money magazine, Janice Revell noted the Boston College Center for Retirement Research’s finding that among some couples where the husband is the primary breadwinner, the best strategy “is for the wife to take Social Security at 62 and the husband to wait.” She added, “In this scenario, a wife would take her benefit at 62 and inherit her husband’s larger check later,” assuming he dies first.

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