Social Security: Does it pay to delay?
July 23, 2007
I thought you might be interested in this information I found on Vanguard.com®.
The first members of the baby boom generation are about to reach another milestone. People born in 1946—the beginning of the boom—will turn 62 next year, making them eligible for early retirement benefits from Social Security.
For more information
Having paid into the federal program for decades, many baby boomers will find the prospect of tapping their benefits appealing. But this may be a situation that calls for delayed gratification.
Taking Social Security at age 62 involves a significant trade-off: In exchange for getting your payments before “full retirement age,” you’ll see your benefits permanently reduced.
Social Security Insurance — it’s none of those things — is such a scam.
The article correctly cites to delay if you can and your guesstimate of your life expectancy.
The article ignores that: the congresscritters can change the game at any time (like the did when they made it taxable); the dollar is not a store of value (hence the number that they cite are devalued by inflation); and the catastrophic effect of your death on your wealth (guessing wrong about you life expectancy deprives your heirs for the fruit of your labor).
The article begs the question of why anyone would be in a scam that provides such a significant negative return. It’s estimated to be a negative 2% per year.
It also fails to factor the TEOTWAWKI arguments that might end the scam. Social Security Insurance is a Ponzi scam that is racist, intergenerational war, unconstitutional, and unsustainable. It transfers money from poor minority men to rich white women. It pits the old against the young by saddling them with the bills later. No where in the Constitution is the gooferement empowered to do all these things. And, like most Ponzi schemes, it collapses when it runs out of suckers.
So, my take is that you should cash out as soon as you can. Too many unavoidable risks. A dollar now invested in gold might be worth far more than an empty promise later.
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update: There’s a Part 2 here: http://tinyurl.com/ypamjp- that’s where the surprise is.
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