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October 23, 2006


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I outlined the calculation of how much you can earn from receiving early distributions on Rational Cents, in article titled "Reaching Retirement: Pulling Partial Benefits or Waiting for Full Benefits" (

Your personal life expectancy is the most important consideration. Since the average 65 year old can expect to live to 85, if you don't expect to reach that you should retire sooner. If you do expect to reach that, and you don't need the money earlier, then it pays to wait until normal retirement. If you do need it, you don't have much choice.

I am dubious of the statement on drawing it early to maximize tax free earnings because increased Social Security is also tax free. It is worth delaying it to standard retirement age if possible. I wouldn't delay it any longer unless working though as the gain is miniscule from that point forward.

The worst case SS scenario for you would be collecting 2/3s at 70. Even with no tax and no age increases, it will still be able to pay out 2/3s forever. Medicare is a different story though and you will need everything you can get for healthcare.

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