Page 43 - Ready Set Retire

Ready. Set. Retire!

weakening the plan as a whole, which in the end isn’t what you
want.

Here’s an example. In the past, the key metric for making
Social Security has been the total amount you can get out of it.
People would focus on the total payout, not the income it
could generate. So they would pay attention to things like the
break even point when determining when to start receiving
benefits.

This is not an efficient way to approach this, or any other, piece
of the retirement picture. Income is an entirely different matter
than accumulation. With income, you are decumulating, and
the forces that help with accumlating are often counter-
productive in the income game. Focusing on the idea of break
even, while perhaps increasing the amount you can get out of
Social Security, can actually weaken the income plan.

Break even, in nearly every case, is meaningless. So much so, I
would say ignoring it is more often than not the right choice,
even if you don’t live long enough to collect a dime of Social Security. Think
of the original purpose of Social Security. It was never intended
as a way to accumulate money. It was intended to give people
an income safety net. One that would supplement income and
provide additional security for the rest of their lives.

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