Just a re-write of the BS the Social Security Administration puts out.
Anyone who has even a little education in finance knows about the “time value of money”. A simple concept that a dollar today is worth more than a dollar a year from today. For secure transactions it usually shows up as an interest rate.
The break-even tables are calculated ignoring the time value of money, almost as if the government skipped class that day. But, if I am even one day late paying them a tax, that department knows all about the time value of money and I am charged interest for making a late payment.
If one accounts for any realistic interest rate, the break even dates get later and later...
I pretty much agree with your argument.
My only caveat would be for high income earners. Then it would be a helluva pay cut to quit work and go on SS. In this situation it would also pay to wait until full retirement, since they’re going to hold $1 for every 3 you earn anyway.
But, it makes no sense to wait after full retirement no matter how much you earn. The incremental tax you pay on top of SS still leaves plenty of SS left over.
It’s time to start preparing myself for this eventuality. I’m going to hold off as long as I can.
For practical purposes I kissed that money goodbye long ago however, I think my loving wife will be able to use it after my death (her family genetics lean towards longevity), so in preparation, articles such as this are very helpful. I’ve recently downloaded a social security for dummies book and I’m going to start educating myself a little bit more than I currently am on Social Security.
My sister-in-law came over a week or so ago and was talking about social security and what she’s doing and I understood about one-third what she was talking about. So that’s my realization point - that it’s time to start figuring it out.
The shame of it all is having to figure it out and possibly miss something. Some folks cant afford to miss anything yet the burden of “discovery” is on them... you would think that things like this and taxes would be simplified to the point where you don’t really have to spend a lot of time educating yourself so you won’t get ripped off the second time around.
Anyone who has even a little education in finance knows about the “time value of money”. A simple concept that a dollar today is worth more than a dollar a year from today. For secure transactions it usually shows up as an interest rate.
The break-even tables are calculated ignoring the time value of money, almost as if the government skipped class that day. But, if I am even one day late paying them a tax, that department knows all about the time value of money and I am charged interest for making a late payment.
If one accounts for any realistic interest rate, the break even dates get later and later...
everyone re-read this one real closely like.
The break-even tables are calculated ignoring the time value of money, almost as if the government skipped class that day. But, if I am even one day late paying them a tax, that department knows all about the time value of money and I am charged interest for making a late payment.
If one accounts for any realistic interest rate, the break even dates get later and later...
They explain that away by pointing to the cost of living (COLA) adjustments made to SSA payments. That makes up for part, but not all, of the time value you mention.