If your full retirement age is 67 and you live to 80. With a 5% interest...
Homework Answers
With a 5% interest rate you will be better off receiving benefits if you are waiting until 67 because of following two reasons –
- Power of compounding: With 5% interest rate, value of your investments will be more at 67 as you will get 5 more years to contribute and earn more interest on your benefits. (It is assumed that 5% interest rate is real rate of interest after inflation)
- If you will live to 80 years then retiring at 67 will give you only 13 years of take the benefits. Therefore you will be better off as it will be distributed among less number of years.
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If
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