Social Security and the 70/70 Retirement Program
Baby Boomers considering retirement should learn a lesson from Bill Fisher. Bill was a native of Kansas City, started investing from scratch at age 72, and over the next 18 years was able to amass a net worth of $1 million. Bill was able to do this because he continued to work until age 84 at his starting job and didn’t take Social Security until age 70. I call Bill’s retirement program the 70/70 Retirement Program.
The first part of the 70/70 Retirement Program involves working until at least 70 years. A study by the Center for Retirement Research at Boston College shows that if the entire Baby Boomer generation retired at age 62, 84% would be at risk of running out of money during their retirement years. Additionally, the study indicated that if these Baby Boomers waited until age 66 to retire, 50% would still be in danger of running out of money. However, if the Boomer group worked into their 70s before retiring, only 14% would still be in the group that might run out of money upon retirement. It becomes quite obvious that continuing to work into your 70s leads to a more secure and rewarding retirement.
The second part of the 70/70 Retirement Program focuses on waiting until age 70 to take your Social Security. Bill Fisher waited until he was 70 to collect his Social Security and it made an extra $2,200 difference. per month. If Bill had taken his Social Security at age 62, he would have received $1,100. per month. Instead, Bill waited until he was 70 and received $3,300. per month.
Bill lived to be 93 years old. He earned a total of $910,000. over the life of your Social Security payments. If he had taken his Social Security at age 62, he would have earned only $405,000. during his lifetime, which is a difference of more than $500,000. in additional income during Bill’s retirement years. What’s also amazing is that the break-even point where Bill started making the most money was only 48 months. In other words, Bill reached retirement option 62 in 48 months or when he was 74 years old. Every month after that, Bill earned $2,200. more each month. This was additional found money that Bill could use to invest in stocks, bonds, and residential real estate.
The 70/70 Retirement Program is easy to follow. You should plan to work until age 70 and should wait to collect Social Security until age 70. This will lead to a more secure and rewarding retirement for you and your family.