Jim, you pretty much typed out a nice concise summary of my thoughts on it. I'm hoping at that point I'm in a similar situation.Up until age 62, Social Security is a tax. After you start collecting it, it is a transfer payment. But from age 62 until you claim it, it is insurance. Specifically, it is insurance against outliving your money. Postpone and it grows 8% a year. I totally get the breakeven analysis. But here's the thing. Breakeven analysis is the wrong tool for insurance. I have auto insurance. I never break even. I have a fire extinguisher. I never break even there either. All insurance fails breakeven analysis. Insurance is the small payment vs the big catastrophe. That catastrophe is being old, unemployable, and broke. The bigger question is will you still be alive when your money is gone, and getting a much bigger check each month—months when you can't particularly get employment—is the goal.
Try looking at it this way: The monthly check I have postponed collecting is treated as the insurance premium I pay to get a check at age 70 which is nearly double the age 62 check. As you breakeven guys point out, I'm not really paying it, since I will get it all back later.
Some other considerations. Social Security is taxable income for most. Not only do you give up the 8% growth each year postponed provides, but you subject the lower amount you do get to income taxation, again, for most people.
So what am I doing? I am retired, and collect dividends. With no wage income, and no Social Security income (yet) I pay zero % tax on dividends and LTCG. I'm taking that. I harvest capital gains to supplement the dividends. So far, zero tax. I have ten years before my RMDs kick in. That means I can do ten more Roth conversions—one each year— deciding how much tax I am willing to pay (last year 14%), so that my RMDs will be lower and I have a source of funds that are tax-free. I plan on claiming Social Security at age 70 unless my doctor recommends I claim sooner.
We're discussing SS in a thread about the stock market crashing. There's something to be said about spending the volatile money first before the insurance plan backed by the US Government. That's also assuming I'm not 100% relying on SS but it is a nice constant base.
Someone can point out that SS will have no money in a few years, but if that's the case the stock market probably isn't looking so hot either.