Two days ago, when I got into the car, it wouldn’t start.  It was dead.  No click, nothing.  I had two choices:  one, get the car jumped, drive to an auto parts store, remove the battery, buy a similar one, install it there, then drive home.  I could have paid less. The issue would have been only if I happened to stall on the way to the auto parts store, or if the problem were not the battery but a faulty starter, which sometimes will still allow the car to be jumped.

Instead, I called AAA, using my membership, under $100 annually, and in 20 minutes someone came over, tested the battery, said that indeed I had a battery problem, and sold me another battery for $116, including installation.

During past battery self-installations, I have lost screws and once dropped two wrenches into the heat shield of the car, where eventually they fell out as I turned a corner one day. I may have paid more than I could have, but having AAA come over and take care of my problem in 45 minutes was convenient.  It was worth it.  I didn’t get upset, I didn’t have to look at batteries, I got what I needed, and I got it installed.  If I happened to love cars, I would have enjoyed the work.  I don’t enjoy putting in batteries.  How much is the convenience worth?  I don’t know.  But it is worth something, and the older I get , the more worth I ascribe to convenience.

Convenience matters.  We left money on the table when we sold our house.  It was worth it. Not having to worry about the house when we left Tucson was worth a lot.  How much?  I don’t know.  I don’t really care.  It was one less major stress.

It costs me to have somebody clean the gutters.  I can do it myself.  I also can fall off the ladder.  Don’t laugh.  My wife, a radiologist, has told me countless stories of X-Rays she has read of people who fell off ladders.  The stories are gruesome—severe head injuries, dislocated ankles, hemothorax, or blood in the chest.  My father fell off a ladder when he was 77; his shoulder was never again the same.

Convenience stores are called that for a reason.  One pays for it.  If one needs a loaf of bread at 2 a.m., one pays a little more and gets it.  All insurance is a convenience.  I can put away money in case my house burns down.  Or, I can pay something and not have to worry whether I am putting away enough.

Urgent Care is a convenience, too.  One pays more for care there than with one’s personal physician, but if I have a bad cough on the weekend, and am concerned about pneumonia, I can get the answer then, not wait until I can be seen by my physician.  Yes, it costs more.  Being hospitalized for pneumonia that might have been prevented is costly, too.

With all of this in mind, when should one take Social Security, when they are 62, 66 (or the current “normal” age), or 70?

Virtually every financial advisor, including Suze Orman (who has changed her mind on the issue) says one should delay as long as possible.  The longer one delays, the more one gets, increasing approximately 8% per year.

A New York Times columnist says he has gotten many spreadsheets from people saying why taking Social Security earlier is better.  He doesn’t agree with them.  He’s right, from a purely financial, logical standpoint.  If one looks out to age 77 or beyond, taking Social Security later turns out to be significantly better, assuming one can predict inflation and one’s longevity.  If inflation stays low, and one lives long, without a doubt, starting Social Security later will be a better choice, if it is a matter of money only.

The issue with finance, however, and indeed with investors, is that we are neither logical nor rational when it comes to money, and that is not necessarily bad.  I haven’t heard “convenience” in any discussion about Social Security, since like many things in the world that have value (love, friendship, caring, kindness; pollution, degraded views, ugliness) convenience is often construed not to have value.  It does have value, but the individual has to decide how much.

So, what was convenient about collecting Social Security at 62?  At the time, I was retired and appreciated receiving money monthly.  It was a psychological boost, pure and simple.  I like to think that I enjoyed the money more at 62 than I will at 72 and 82, assuming I live that long.  Indeed, I’ve received money for the last 50 months, rather than not getting any by waiting.  Does that matter?  It depends upon one’s circumstances, inflation, and taxes.  How important is the psychological factor? I don’t know, but I think it is significant.  Four years into this, I have no regrets.

If it takes me until I am 78 until I start to lose money, or even earlier, I’m not going to be upset.  For 16 years, even 10 or 12, I was ahead of those who waited.  After that, they will have received more money from Social Security than I. I hope they enjoy it; I hope they use it well and are happy.

When should one take Social Security?  If one purely wants to maximize income, wait until age 70.  One gets about 80% more per month than at 62, but one also needs several years to make up the initial difference.  For many others, wait until 67.  The table shows it clearly.  There is no right or wrong answer, if one factors in convenience and psychology to the financial picture.  I believe that convenience matters.  If having the money now, even if less, to deal with the present is important, then taking Social Security early is the best move.  If getting more money later is more important, taking it later is the better strategy.

BORN 1943-54:                Age 62=75;     Age 66=100;   Age 70=132

BORN 1957                        Age 62=72.5;  Age 66=96.7;  Age 70=128

BORN 1960 OR AFTER        Age 62=70;    Age 66=93.3;  Age 70=124

I don’t underestimate the worth of those things that either cannot be or are not measurable.  If we factored our Middle Eastern policy into the cost of gasoline, we would now drive cars getting 150 miles per gallon, if they even used gas.  If we factored into the cost of food pesticides, transport, waste, and environmental destruction, we would be eating differently.  Economics often deals with things that can be clearly measured, using nice mathematical formulae, too often assuming those variables, and only those variables, are all that matter.  They don’t. We are emotional beings who think we are rational.

Life is not as simple as we would like it to be.


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