Earlier this week, I posted some info on social security planning. This is a follow-up to answer a reader’s question about the impacts of delaying social security benefits until 67, and drawing down his 401k instead to cover living expenses. See original post with comments here.
An Important Note About Projections
The projections here are useful for assessing the impact of taking social security at 62 v. taking at 67 under the same set of market conditions. In reality, we have no idea if these market returns will hold true in the future.
That said, it’s the best we got. I like to take reasonably conservative assessments of growth and model what my ending balance might look like in the future.
Create a Spreadsheet
I have a a pretty detailed spreadsheet I use for my retirement planning. I created a scaled-back version to answer this question, but it is still a little busy to show here, but let’s give it a try.
Basic Assumptions
In order to make comparisons, we need some basic assumptions. We’ll assume that a couple is retiring at 62 and both are the same age. They’ve both saved in their 401ks over the years so their combined 401k value is $1,000,000. Well done!
Their current annual spending is $61,000. I read a bit about this and this seems to be a reasonable number. I got this from valuepenguin. I’m not sure if I like the articles, or I just think it’s a cool name…either way, here it is.
I found an article that said the average American’s social security benefit at 62 is $15,579, and at 67 it’s $22,256, so we’ll use those numbers.
Asset Allocation
As you know, asset allocation is important. Equities are more volatile then fixed income and cash, so as we get closer to needing to withdraw money, we want to be moving from equities to cash and fixed income. You can read more here.
For this exercise, we’ll assume that our assets are 20% in cash, 20% in fixed income, and 60% in equity. In reality, we’ll likely adjust the allocation as we age, but in order to prevent the spreadsheet from getting out of hand, and to provide an apples to apples comparison, we’ll assume we rebalance every January to these allocations.
Growth Rates
In prior posts, I’ve talked about the S&P 500 averaging 10% annual returns with dividends invested over the past 100 years or so. Let’s be conservative and say we’ll get 6% annual returns from our equity investment. We’ll assume 2% for cash. Sure, treasuries are getting 5% today, but that likely won’t last forever. And we’ll say 4% for bonds. That’s conservative as well.
Inflation
As we’ve all discovered over the last 2 years or so, inflation eats into our buying power. A dollar just doesn’t buy as much as it used to. We’ll need to account for this. We’ll assume our expenses increase by 3% each year to account for inflation.
Spreadsheet Data and Calculations
The first 9 columns are pretty self-explanatory, but shoot me a note or post a question.
The cash, bond and equity values are calculated at the start of each year by taking the prior year’s ending balance and applying the ratios in the asset allocation assumption.
The cash, bond and equity gains multiply the return % X the value for that asset class.
Total market gain is the sum of the cash, bond and equity gains.
Expenses start at our $61,000 assumption and increase by 3% per year.
Net income is income (social security) minus expenses.
Ending balance is starting value + gains – net expenses.
Next year we start again with the reallocation and the same calculations.
| Year | Age | Beginning Balance | Social Security | Spouse Social Security | Cash Return | Bond Annl % Change | S&P Change with Dividends reinvested | Inflation | Cash Value | Bond Value | Equity Value | Cash Gain | Bond Gain | Equity Gain | Total Market Gain $ | Sum of Income | Expenses | Net income | Ending Balance |
| 2024 | 62 | $1,000,000.00 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $200,000.00 | $200,000.00 | $600,000.00 | $4,000.00 | $8,000.00 | $36,000.00 | $48,000.00 | $31,158.00 | $61,000.00 | -$29,842.00 | $1,018,158.00 |
| 2025 | 63 | $1,018,158.00 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $203,631.60 | $203,631.60 | $610,894.80 | $4,072.63 | $8,145.26 | $36,653.69 | $48,871.58 | $31,158.00 | $62,830.00 | -$31,672.00 | $1,035,357.58 |
| 2026 | 64 | $1,035,357.58 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $207,071.52 | $207,071.52 | $621,214.55 | $4,141.43 | $8,282.86 | $37,272.87 | $49,697.16 | $31,158.00 | $64,714.90 | -$33,556.90 | $1,051,497.85 |
| 2027 | 65 | $1,051,497.85 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $210,299.57 | $210,299.57 | $630,898.71 | $4,205.99 | $8,411.98 | $37,853.92 | $50,471.90 | $31,158.00 | $66,656.35 | -$35,498.35 | $1,066,471.40 |
| 2028 | 66 | $1,066,471.40 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $213,294.28 | $213,294.28 | $639,882.84 | $4,265.89 | $8,531.77 | $38,392.97 | $51,190.63 | $31,158.00 | $68,656.04 | -$37,498.04 | $1,080,163.99 |
| 2029 | 67 | $1,080,163.99 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $216,032.80 | $216,032.80 | $648,098.39 | $4,320.66 | $8,641.31 | $38,885.90 | $51,847.87 | $31,158.00 | $70,715.72 | -$39,557.72 | $1,092,454.14 |
| 2030 | 68 | $1,092,454.14 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $218,490.83 | $218,490.83 | $655,472.48 | $4,369.82 | $8,739.63 | $39,328.35 | $52,437.80 | $31,158.00 | $72,837.19 | -$41,679.19 | $1,103,212.75 |
| 2031 | 69 | $1,103,212.75 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $220,642.55 | $220,642.55 | $661,927.65 | $4,412.85 | $8,825.70 | $39,715.66 | $52,954.21 | $31,158.00 | $75,022.31 | -$43,864.31 | $1,112,302.66 |
| 2032 | 70 | $1,112,302.66 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $222,460.53 | $222,460.53 | $667,381.59 | $4,449.21 | $8,898.42 | $40,042.90 | $53,390.53 | $31,158.00 | $77,272.97 | -$46,114.97 | $1,119,578.21 |
| 2033 | 71 | $1,119,578.21 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $223,915.64 | $223,915.64 | $671,746.92 | $4,478.31 | $8,956.63 | $40,304.82 | $53,739.75 | $31,158.00 | $79,591.16 | -$48,433.16 | $1,124,884.80 |
| 2034 | 72 | $1,124,884.80 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $224,976.96 | $224,976.96 | $674,930.88 | $4,499.54 | $8,999.08 | $40,495.85 | $53,994.47 | $31,158.00 | $81,978.90 | -$50,820.90 | $1,128,058.37 |
| 2035 | 73 | $1,128,058.37 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $225,611.67 | $225,611.67 | $676,835.02 | $4,512.23 | $9,024.47 | $40,610.10 | $54,146.80 | $31,158.00 | $84,438.27 | -$53,280.27 | $1,128,924.90 |
| 2036 | 74 | $1,128,924.90 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $225,784.98 | $225,784.98 | $677,354.94 | $4,515.70 | $9,031.40 | $40,641.30 | $54,188.40 | $31,158.00 | $86,971.41 | -$55,813.41 | $1,127,299.89 |
| 2037 | 75 | $1,127,299.89 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $225,459.98 | $225,459.98 | $676,379.93 | $4,509.20 | $9,018.40 | $40,582.80 | $54,110.39 | $31,158.00 | $89,580.56 | -$58,422.56 | $1,122,987.72 |
| 2038 | 76 | $1,122,987.72 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $224,597.54 | $224,597.54 | $673,792.63 | $4,491.95 | $8,983.90 | $40,427.56 | $53,903.41 | $31,158.00 | $92,267.97 | -$61,109.97 | $1,115,781.16 |
| 2039 | 77 | $1,115,781.16 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $223,156.23 | $223,156.23 | $669,468.70 | $4,463.12 | $8,926.25 | $40,168.12 | $53,557.50 | $31,158.00 | $95,036.01 | -$63,878.01 | $1,105,460.64 |
| 2040 | 78 | $1,105,460.64 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $221,092.13 | $221,092.13 | $663,276.39 | $4,421.84 | $8,843.69 | $39,796.58 | $53,062.11 | $31,158.00 | $97,887.09 | -$66,729.09 | $1,091,793.66 |
| 2041 | 79 | $1,091,793.66 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $218,358.73 | $218,358.73 | $655,076.20 | $4,367.17 | $8,734.35 | $39,304.57 | $52,406.10 | $31,158.00 | $100,823.71 | -$69,665.71 | $1,074,534.05 |
| 2042 | 80 | $1,074,534.05 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $214,906.81 | $214,906.81 | $644,720.43 | $4,298.14 | $8,596.27 | $38,683.23 | $51,577.63 | $31,158.00 | $103,848.42 | -$72,690.42 | $1,053,421.27 |
| 2043 | 81 | $1,053,421.27 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $210,684.25 | $210,684.25 | $632,052.76 | $4,213.69 | $8,427.37 | $37,923.17 | $50,564.22 | $31,158.00 | $106,963.87 | -$75,805.87 | $1,028,179.62 |
| 2044 | 82 | $1,028,179.62 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $205,635.92 | $205,635.92 | $616,907.77 | $4,112.72 | $8,225.44 | $37,014.47 | $49,352.62 | $31,158.00 | $110,172.79 | -$79,014.79 | $998,517.46 |
| 2045 | 83 | $998,517.46 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $199,703.49 | $199,703.49 | $599,110.48 | $3,994.07 | $7,988.14 | $35,946.63 | $47,928.84 | $31,158.00 | $113,477.97 | -$82,319.97 | $964,126.33 |
| 2046 | 84 | $964,126.33 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $192,825.27 | $192,825.27 | $578,475.80 | $3,856.51 | $7,713.01 | $34,708.55 | $46,278.06 | $31,158.00 | $116,882.31 | -$85,724.31 | $924,680.08 |
| 2047 | 85 | $924,680.08 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $184,936.02 | $184,936.02 | $554,808.05 | $3,698.72 | $7,397.44 | $33,288.48 | $44,384.64 | $31,158.00 | $120,388.78 | -$89,230.78 | $879,833.95 |
| 2048 | 86 | $879,833.95 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $175,966.79 | $175,966.79 | $527,900.37 | $3,519.34 | $7,038.67 | $31,674.02 | $42,232.03 | $31,158.00 | $124,000.44 | -$92,842.44 | $829,223.54 |
| 2049 | 87 | $829,223.54 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $165,844.71 | $165,844.71 | $497,534.12 | $3,316.89 | $6,633.79 | $29,852.05 | $39,802.73 | $31,158.00 | $127,720.45 | -$96,562.45 | $772,463.82 |
| 2050 | 88 | $772,463.82 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $154,492.76 | $154,492.76 | $463,478.29 | $3,089.86 | $6,179.71 | $27,808.70 | $37,078.26 | $31,158.00 | $131,552.07 | -$100,394.07 | $709,148.01 |
| 2051 | 89 | $709,148.01 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $141,829.60 | $141,829.60 | $425,488.81 | $2,836.59 | $5,673.18 | $25,529.33 | $34,039.10 | $31,158.00 | $135,498.63 | -$104,340.63 | $638,846.49 |
| 2052 | 90 | $638,846.49 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $127,769.30 | $127,769.30 | $383,307.89 | $2,555.39 | $5,110.77 | $22,998.47 | $30,664.63 | $31,158.00 | $139,563.59 | -$108,405.59 | $561,105.53 |
| 2053 | 91 | $561,105.53 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $112,221.11 | $112,221.11 | $336,663.32 | $2,244.42 | $4,488.84 | $20,199.80 | $26,933.07 | $31,158.00 | $143,750.50 | -$112,592.50 | $475,446.10 |
| 2054 | 92 | $475,446.10 | $15,579.00 | $15,579.00 | 2% | 4% | 6% | 3% | $95,089.22 | $95,089.22 | $285,267.66 | $1,901.78 | $3,803.57 | $17,116.06 | $22,821.41 | $31,158.00 | $148,063.01 | -$116,905.01 | $381,362.50 |
Social Security at 62
In the table above, we can see that taking social security at 62, supplementing our income with 401k withdrawals to get to $61,000 in expenses, projected out for 30 years, leaves us with almost $400,000.
Compounding is magic – especially over a long period like 30 years. Read more here.
Social Security at 67
| Year | Age | Beginning Balance | Social Security | Spouse Social Security | Cash Return | Bond Annl % Change | S&P Change with Dividends reinvested | Inflation | Cash Value | Bond Value | Equity Value | Cash Gain | Bond Gain | Equity Gain | Total Market Gain $ | Sum of Income | Expenses | Net income | Ending Balance |
| 2024 | 62 | $1,000,000.00 | 2% | 4% | 6% | 3% | $200,000.00 | $200,000.00 | $600,000.00 | $4,000.00 | $8,000.00 | $36,000.00 | $48,000.00 | $0.00 | $61,000.00 | -$61,000.00 | $987,000.00 | ||
| 2025 | 63 | $987,000.00 | 2% | 4% | 6% | 3% | $197,400.00 | $197,400.00 | $592,200.00 | $3,948.00 | $7,896.00 | $35,532.00 | $47,376.00 | $0.00 | $62,830.00 | -$62,830.00 | $971,546.00 | ||
| 2026 | 64 | $971,546.00 | 2% | 4% | 6% | 3% | $194,309.20 | $194,309.20 | $582,927.60 | $3,886.18 | $7,772.37 | $34,975.66 | $46,634.21 | $0.00 | $64,714.90 | -$64,714.90 | $953,465.31 | ||
| 2027 | 65 | $953,465.31 | 2% | 4% | 6% | 3% | $190,693.06 | $190,693.06 | $572,079.18 | $3,813.86 | $7,627.72 | $34,324.75 | $45,766.33 | $0.00 | $66,656.35 | -$66,656.35 | $932,575.30 | ||
| 2028 | 66 | $932,575.30 | 2% | 4% | 6% | 3% | $186,515.06 | $186,515.06 | $559,545.18 | $3,730.30 | $7,460.60 | $33,572.71 | $44,763.61 | $0.00 | $68,656.04 | -$68,656.04 | $908,682.87 | ||
| 2029 | 67 | $908,682.87 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $181,736.57 | $181,736.57 | $545,209.72 | $3,634.73 | $7,269.46 | $32,712.58 | $43,616.78 | $44,512.00 | $70,715.72 | -$26,203.72 | $926,095.93 |
| 2030 | 68 | $926,095.93 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $185,219.19 | $185,219.19 | $555,657.56 | $3,704.38 | $7,408.77 | $33,339.45 | $44,452.60 | $44,512.00 | $72,837.19 | -$28,325.19 | $942,223.35 |
| 2031 | 69 | $942,223.35 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $188,444.67 | $188,444.67 | $565,334.01 | $3,768.89 | $7,537.79 | $33,920.04 | $45,226.72 | $44,512.00 | $75,022.31 | -$30,510.31 | $956,939.76 |
| 2032 | 70 | $956,939.76 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $191,387.95 | $191,387.95 | $574,163.86 | $3,827.76 | $7,655.52 | $34,449.83 | $45,933.11 | $44,512.00 | $77,272.97 | -$32,760.97 | $970,111.89 |
| 2033 | 71 | $970,111.89 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $194,022.38 | $194,022.38 | $582,067.14 | $3,880.45 | $7,760.90 | $34,924.03 | $46,565.37 | $44,512.00 | $79,591.16 | -$35,079.16 | $981,598.10 |
| 2034 | 72 | $981,598.10 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $196,319.62 | $196,319.62 | $588,958.86 | $3,926.39 | $7,852.78 | $35,337.53 | $47,116.71 | $44,512.00 | $81,978.90 | -$37,466.90 | $991,247.91 |
| 2035 | 73 | $991,247.91 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $198,249.58 | $198,249.58 | $594,748.75 | $3,964.99 | $7,929.98 | $35,684.92 | $47,579.90 | $44,512.00 | $84,438.27 | -$39,926.27 | $998,901.55 |
| 2036 | 74 | $998,901.55 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $199,780.31 | $199,780.31 | $599,340.93 | $3,995.61 | $7,991.21 | $35,960.46 | $47,947.27 | $44,512.00 | $86,971.41 | -$42,459.41 | $1,004,389.41 |
| 2037 | 75 | $1,004,389.41 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $200,877.88 | $200,877.88 | $602,633.64 | $4,017.56 | $8,035.12 | $36,158.02 | $48,210.69 | $44,512.00 | $89,580.56 | -$45,068.56 | $1,007,531.54 |
| 2038 | 76 | $1,007,531.54 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $201,506.31 | $201,506.31 | $604,518.92 | $4,030.13 | $8,060.25 | $36,271.14 | $48,361.51 | $44,512.00 | $92,267.97 | -$47,755.97 | $1,008,137.08 |
| 2039 | 77 | $1,008,137.08 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $201,627.42 | $201,627.42 | $604,882.25 | $4,032.55 | $8,065.10 | $36,292.93 | $48,390.58 | $44,512.00 | $95,036.01 | -$50,524.01 | $1,006,003.65 |
| 2040 | 78 | $1,006,003.65 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $201,200.73 | $201,200.73 | $603,602.19 | $4,024.01 | $8,048.03 | $36,216.13 | $48,288.18 | $44,512.00 | $97,887.09 | -$53,375.09 | $1,000,916.73 |
| 2041 | 79 | $1,000,916.73 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $200,183.35 | $200,183.35 | $600,550.04 | $4,003.67 | $8,007.33 | $36,033.00 | $48,044.00 | $44,512.00 | $100,823.71 | -$56,311.71 | $992,649.03 |
| 2042 | 80 | $992,649.03 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $198,529.81 | $198,529.81 | $595,589.42 | $3,970.60 | $7,941.19 | $35,735.37 | $47,647.15 | $44,512.00 | $103,848.42 | -$59,336.42 | $980,959.76 |
| 2043 | 81 | $980,959.76 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $196,191.95 | $196,191.95 | $588,575.86 | $3,923.84 | $7,847.68 | $35,314.55 | $47,086.07 | $44,512.00 | $106,963.87 | -$62,451.87 | $965,593.96 |
| 2044 | 82 | $965,593.96 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $193,118.79 | $193,118.79 | $579,356.38 | $3,862.38 | $7,724.75 | $34,761.38 | $46,348.51 | $44,512.00 | $110,172.79 | -$65,660.79 | $946,281.69 |
| 2045 | 83 | $946,281.69 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $189,256.34 | $189,256.34 | $567,769.01 | $3,785.13 | $7,570.25 | $34,066.14 | $45,421.52 | $44,512.00 | $113,477.97 | -$68,965.97 | $922,737.24 |
| 2046 | 84 | $922,737.24 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $184,547.45 | $184,547.45 | $553,642.34 | $3,690.95 | $7,381.90 | $33,218.54 | $44,291.39 | $44,512.00 | $116,882.31 | -$72,370.31 | $894,658.32 |
| 2047 | 85 | $894,658.32 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $178,931.66 | $178,931.66 | $536,794.99 | $3,578.63 | $7,157.27 | $32,207.70 | $42,943.60 | $44,512.00 | $120,388.78 | -$75,876.78 | $861,725.14 |
| 2048 | 86 | $861,725.14 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $172,345.03 | $172,345.03 | $517,035.09 | $3,446.90 | $6,893.80 | $31,022.11 | $41,362.81 | $44,512.00 | $124,000.44 | -$79,488.44 | $823,599.51 |
| 2049 | 87 | $823,599.51 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $164,719.90 | $164,719.90 | $494,159.71 | $3,294.40 | $6,588.80 | $29,649.58 | $39,532.78 | $44,512.00 | $127,720.45 | -$83,208.45 | $779,923.83 |
| 2050 | 88 | $779,923.83 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $155,984.77 | $155,984.77 | $467,954.30 | $3,119.70 | $6,239.39 | $28,077.26 | $37,436.34 | $44,512.00 | $131,552.07 | -$87,040.07 | $730,320.11 |
| 2051 | 89 | $730,320.11 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $146,064.02 | $146,064.02 | $438,192.07 | $2,921.28 | $5,842.56 | $26,291.52 | $35,055.37 | $44,512.00 | $135,498.63 | -$90,986.63 | $674,388.84 |
| 2052 | 90 | $674,388.84 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $134,877.77 | $134,877.77 | $404,633.31 | $2,697.56 | $5,395.11 | $24,278.00 | $32,370.66 | $44,512.00 | $139,563.59 | -$95,051.59 | $611,707.92 |
| 2053 | 91 | $611,707.92 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $122,341.58 | $122,341.58 | $367,024.75 | $2,446.83 | $4,893.66 | $22,021.49 | $29,361.98 | $44,512.00 | $143,750.50 | -$99,238.50 | $541,831.41 |
| 2054 | 92 | $541,831.41 | $22,256.00 | $22,256.00 | 2% | 4% | 6% | 3% | $108,366.28 | $108,366.28 | $325,098.84 | $2,167.33 | $4,334.65 | $19,505.93 | $26,007.91 | $44,512.00 | $148,063.01 | -$103,551.01 | $464,288.30 |
You’ll see the same table, except that the social security value is 0 until age 67, at which point it is a larger amount because we’re at full retirement age. You’ll also see that our net income is the full -$61,000 because we have no social security to offset expenses until we reach 67.
Comparison
The good news is that under both scenarios, our money appears to last us beyond 30 years. We end up with a little more if we wait until 67. It’s about $80,000 more, which ain’t peanuts.
But again, this is a projection based on some assumptions. Will these hold true? Who knows.
Wrap-Up
Saving a million dollars is no small feat, but the powers of compounding, and starting early can get you there.
Unfortunately the formulas in my spreadsheet don’t come through above. Hopefully based on my descriptions, you can add them into your own spreadsheet. If you have a question, post a comment, or shoot me a note through the contacts page and I can send you a copy of my sheet.
Thanks for the question and let me know what else is on your mind.
Very illustrious.
Thanks for reading and commenting!