Twisted Logic of the Day

May 10, 2016
The Motley Fool: 3 great reasons to take Social Security benefits at 62

You want to make a lifestyle decision

1. For many, taking Social Security early allows them to retire at an earlier age or cut back on their hours.

2. Financial planners would tell you that you're leaving money on the table in many cases...

As a noun, many means majority of people.

If taking the benefits early actually does provide less money overall in retirement, especially if one lives into their 90s...

And if retiring early requires more money overall in returement, in all cases...

Then how does having less money in retirement turn into having more money in retirement?

I'm not at all convinced that this is a great reason to take benefits at 62. In fact, I believe it's a horrible reason. It's similar, at least to me, to saying that you can retire earlier if you have a very large credit limit on your credit card and you'd like to take an extended cruise while you're still young enough to really enjoy it. You'd like to make a fun lifestyle decision.

Good luck on that.

For what it is worth, I won't be taking benefits at 62. I'm planning to wait as long as possible.

If I take benefits later, I won't regret it if I die at 65 and therefore never get a dime out of Social Security. I'll be dead. I won't be able to regret anything.

If I take benefits earlier, I will regret it if I die at 100. I'll be eating the regular cat food instead of the premium brands! I say this because the 5-year TIPS currently yields -0.34%. I am therefore not optimistic that my retirement nest egg can last that long. Taking benefits earlier wouldn't help, more than likely.

That's just me though. This is not investment advice.