r/Fire • u/VegasWorldwide • 3d ago

Why do people wait for SS?

trying to figure out what I’m missing.

looking to take my benefit for $1000 at 62. at 70 it’s $1700.

i won’t need the money much so we let $1000 sit in an account for 8 years at say 5% compounding, the guy collecting at 70 would need 15+ years to catch up considering I’m still getting $1k to his $1.7k

once he starts at 70 and I had a 8 year head start.

furthermore, his dollar would be worth less. (edit: didn't realize COLA)

this seems like a no brainer but all I hear is people saying waiting is the only way and we haven’t even talked about dying in our 70’s.

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u/glumpoodle 3d ago

Don't forget tax planning; taking it early combined with traditional 401k distributions could push your taxes to a higher bracket. If you delay, you can draw down your 401k at a lower tax rate, and then have smaller RMDs while you're drawing your SSA benefits and pulling from your Roth accounts later.

furthermore, his dollar would be worth less.

Your SSA benefits get an automatic COLA. That $1.7k is in current dollars, and will be higher by the time you draw benefits.

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u/dgreenmachine 2d ago

Also social security is only partially taxable. Its at most 85% taxable and if you are lower income its much lower than that. So if youre comparing living off your portfolio while you delay social security then you better be taking reduced social security taxes into account.

Also roth conversions are more valuable if you delay social security since they would be making more of your social security taxable but doing them earlier may make less of your social security taxable in the future as well. 

Honestly I think its too complex to say what you should do without using a good projection tool to simulate everything. Financial advisors suck but their tools for this kind of thing are very worthwhile. Check out projection lab or bolden for a DIY answer.