The Cash Flow Clock: For Retirees - Book - Page 89
The Cash Flow Clock
Social Security
Social Security makes up an average of almost 65%
of income in retirement and is one the most important
considerations for financial planning.
Social Security can be taken as early as 62 for most
retirees (survivor benefits can start as early as age 60
and disability can begin much sooner). The longer
we wait to take Social Security, the higher the
monthly amount becomes. The government
incentivizes us to wait as long as possible because
they hope we die. In order to justify waiting until age
70 (the maximum age), we need to live at least past
age 80. The government knows that while that may
be the case for some, most won’t live that long, and
the government will come out ahead. Of course, if
we know when we are going to die, this decision
becomes much easier.
Another problem with waiting is inflation. Social
Security benefits increase a bit each year based on a
cost of living adjustment. However, that adjustment
does not keep up with inflation. The money we
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