Interesting point, and I think you are correct. The S.S. Administration says this:
According to data compiled by the Social Security Administration:
- A man reaching age 65 today can expect to live, on average, until age 84.3.
So, as a rough calculation ignoring the increased payments from inflation which would make the puzzle too complicated but would benefit an older person because the increases based on % would be greater:
If a man would get $2,000 per month at age 65 and he defers his payments until age 70 he will have forfeited $120,000 of income that he would have drawn between ages 65 and 70.
At age 70 he would draw $2,800 per month which is $9600 per year more than if he had taken the payouts at age 65.
The forfeited income of $120,000 if divided by $9,600 equals 12.5 Which means it would take him another 12.5 years to make up the income he forfeited by not taking the payouts at age 65.
Which would put him at age 77.5 And the S.S. data says that on average a many will who has reached age 65 will live to be 84.3 years old.
But if he dies sooner than average he just busted by hitting a 16 against a dealer Ace. And if he lives to an age greater than 84.3 then he drew a 10 on his double on 11 against a 10.
This is a rough calculation. It would be possible to make a much more complex reckoning but that is not for me. I'll leave that for the Mathletes here.
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