The above is quoted from an article at ThinkAdvisors.com, it thoroughly discusses how to evaluate the social security claiming decision.
Below is an example in the article that clearly explains how to approach such an evaluation:
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By delaying claiming from age 69 to age 70, the healthy client may forego $30,000 in income for one year in order to receive an additional $2,400 in annual income for life starting at age 70. What is the value of this income?
Simply multiply the survival probability by the present value of the payment. The value of a monthly payment during the 75th year of age for a man is about $2,250. It’s about $1,500 for his 85th year and $470 for his 95th year. In total, the present value is $44,700, or nearly 50% higher than the income he gave up.
For a woman, the present value is $48,500, or 62% higher. Put another way, the healthy female client can gain $18,500 in expected retirement wealth by simply waiting a year to claim.
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