July 24, 2014

SS SHOULDN'T START UNTIL THEN:

The Secret of Saving Less for Retirement: Work Until 70 (Allison Schrager, July 24, 2014, Businessweek)

[T]he 15 percent recommended saving rate assumes retirement at age 65. Work until age 70, and you only need to save a far more manageable 6 percent.

Delaying retirement means more years of saving and fewer years of retirement to finance from savings, all things being equal. The bigger factor, though, is Social Security. As of today, taking Social Security benefits at 70 instead of 65 makes a tremendous difference. Let's take as an example a 35-year-old earning $49,000 per year, the median income for his age. If he retires at age 65, he can expect about $18,200 a year from Social Security. If he waits until he's 70, he'll get $26,500 a year, an increase of 45 percent.
Posted by at July 24, 2014 4:58 PM
  
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