When Should I Start Taking Social Security?

This might be the most common retirement planning question we get (and one of the most impactful). There are many variables to consider but the most important, and maybe the simplest to understand, is your expected longevity.  At its core, Social Security is a supplemental income to help support living during Retirement.  The monthly benefit continues to grow 8% per year until age 70 where it hits its maximum and then continues for the rest of your life.  

I love this chart from JP Morgan as a simple way to visualize your expected longevity on the X axis compared to the expected return (or portfolio risk) on the Y axis.  As you can see, the initial breakeven point for waiting until 70 beings at an 81 year life expectancy.  As people live longer and longer it is important to make sure we are considering this longevity as an important planning aspect.

It is difficult to visualize but this next chart is incredibly powerful to show how long couples are living now.  If you reach the age of 65, there is a 90% chance that one of the spouses will still be alive at 85 and nearly 75% odds that one of you will be living at 90.  Theres even a 19% chance of reaching 100!

Now it is not as simple as just getting the largest monthly payment possible.  The biggest roadblock being, the longer you delay, the longer you must live off your portfolio without supplemental income.  This is where Westview can provide a comprehensive financial plan to create a streamlined cash flow plan.  Everyone’s situation is unique and there are many strategies at our disposal to provide peace of mind during this large financial decision.