My 50 month experiment is over. My FRA (Full Retirement Age) is 66 years and 2 months, so as of August, I'm officially at FRA. As you may know, I took SS as soon as I could after turning 62 in June of 2017.
I started with a theoretical balance of $200,000 in an IRA invested in Vanguard's Dividend Appreciation Admiral Fund (VDADX). I ran an experiment where I had three scenarios:
1. Draw down an amount equal to the 'net' amount needed to match an SS payment, waiting for FRA to file for SS. This is for an Iowa taxpayer, who basically pays state taxes on IRA distributions, but not on SS payments. Most taxpayers pay federal taxes on 85% of their SS payment.
2. Claimed at 62, invested the check, and drew down the IRA as in scenario 1.
3. Filed at 62 and left the IRA untouched, using the SS payments for expenses.
Results:
total SS income - $105,150
Accumulated value of SS investment - $154,333 (this includes $5110 in dividends)
Scenario 1 (Willie Waiter) - IRA balance of $186,360. Claiming at FRA would amount to $2853/month ($721 more than I'm getting now)
Scenario 2 (Irma Investit) - IRA balance of $186,360 Plus $154,333 from the invested SS payments, for a total of $340693.
Scenario 3 (Sam Spendit) - $349,483 in the IRA account
This fund (VDADX) in the time period tested, averaged 11.3% annual return. The future cannot be predicted, but at this rate, waiting would never make sense. If the fund averaged what the general stock market has averaged since 1929 (depending on who you ask) that is roughly 10%, also higher than the SS enticement of 8% annual increase.
At least during this time span, filing at 62 was the right thing to do for me. Technically, I have a $149,483 nest egg courtesy of Uncle Sam (the difference in my portfolio by not touching my own savings).
Your mileage may vary!