I was going to say the same thing.
If you invest it, you’re far better off taking it at 62 and plowing it into an IRA.
For most people.... if you take ss at 65 you have to live until 81 before you have drawn as much money as taking it at 62 earns you.
I am not a fan of “waiting” to an older age (unless still actively working full time), to increase the monthly amount. Just invest the money, if you don’t need it. But if you wait, and you die before collecting, you will end up getting ZERO.
Best to use the Social Security first, before dipping into your other savings or retirement accounts, since you can generally leave the other accounts to your spouse or children.
JMHO
Sounds good except for this:
“People filing as individuals with a combined income of $25,000-$34,000 must pay income taxes on up to 50% of their Social Security benefits. For individuals with a combined income of more than $34,000, up to 85% of Social Security benefits will be subject to income taxes.”
It doesn’t work that way. From what I understand, because I was going to take it in a few months is
The SS is subject to the 2 for 1 rule meaning you lose $1 of SS for every $2 you earn. If you make enough, you don’t collect a penny of SS.
Instead, once you reach full retirement age, the gov’t adds up all the benefits you didn’t get because of the penalty, and add them to your regular payments until life expectancy which is 83. In other words, if you were supposed to get $1600 a month at 62, you would miss 4 years worth of payments assuming your retirement age is 66. so, $1600 x 48 = $76,800. Then you take that amount, and divide by 17 (number of life expectancy years left), then divide by 12. That is the amount you would have added to your $1600 per month which is $376.47 so your benefit would be $1976.47 until you turn 84 at which time is drops to $1600.
In other words, it works if you think you’ll live, the gov’t is betting you die.
Helluva system.
I dunno about you, but I find investing stressful. Which stock, when to buy, how much to buy, when to sell, whether or not to go long or short etc. I do it, but it’s a lot of work.
You do realize if you have any other reasonable income and take early retirement it will get taxed to nothing ...
Unfortunately, only 'earned income' can be put in an IRA. Pensions, Social Security benefits, gains from investments etc., are not considered 'earned income'.
You can't invest Social Security funds into an IRA. Only "earned income" can be invested. You can take SS and if you are still working and have earned income, you can invest up to $6500 per year (if you're over 50) of your earned income. You can also contribute to a non-working spouse's IRA from your earned income if you file jointly.
You will not get the tax reduction for contributing to an IRA since Social Security payments are not earned income.
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>> “If you invest it, you’re far better off taking it at 62 and plowing it into an IRA.” <<
Except for the fact that 80% of it will be taxed at the rate applicable to your regular income.
That could send half or more of it down the sewer.