Delay Payments?

I don’t know if this calculator will be useful to anyone, but I used it to decide when to start collecting Social Security. I’m sure there are other situations where this spreadsheet may come in handy, although as I write this, none come to mind.

My plan was to work until I was 70. So should I take S.S. at 66 or wait and start collecting when I reached 70, and receive a  higher payment? By delaying, the payments go up 8% a year until you reach 70.  That means my payment would be 132% higher in 4 years, than if I took it at 66. I considered two other assumptions:

  • What interest rate will I earn over this period (this rate is used throughout the analysis).
  • What will my marginal tax rates be before and after I retire.

I set up two cash flows. One assuming I start at 66 and the other waiting until 70. When the cumulative payments and after tax interest for waiting, reached the same cash flow for starting at 66, I had my break-even. It turns out I would not break even until I was almost 84. A quick look at life expectancy tables for single males convinced me to start at 66.

Their are other factors to consider, particularly if you have a spouse, so don’t use this as the only deciding factor in your decision. Also, I ended up retiring at 68 after a management change. Sometimes you find not everyone shares in your plans to continue to work until 70.

Break-Even – Delay Payments

Download workbook “Delay_Payments” from: 

Downloads Written in Excel 2013

Don Pistulka
Don Pistulka

Retired Credit Union CFO - Finance
Background: over 40 years in investments, asset/Liability management, banking, securities trader.
Worked for: California Credit Union, WesCorp, CalFed S&L, Crocker Bank, Carroll McEntee, Federal Home Loan Bank Board (D.C.), Western Asset Management, Security Pacific National Bank.

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