Social Security -- Take it at 62, 67 or 70

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Big Dog
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Re: Social Security -- Take it at 62, 67 or 70

Post by Big Dog »

smitcat wrote: Sat Aug 17, 2019 4:46 pm
BigJohn wrote: Sat Aug 17, 2019 2:05 pm
smitcat wrote: Sat Aug 17, 2019 8:47 am "However, there are also a fair number who have choices,"
If you check the statistics - there is a very low % who have this choice.
smitcat, I've seen stats on claiming age but never on how many had enough other resources to wait. I suspect part of the issue is defining "enough" as the comfort level with spending down taxable or IRAs is going to vary widely. If you have a link, please post as I' like to see the data. If it's based on some objective analysis of enough, then it's a valid point. If it's based on asking people if they have enough then I think that answer will be influenced by the claim early emotions I noted above so not really an independent variable.
Just look up the amount of total savings the average person approaching or in retirement has available - quite easy to look up and very eye opening.
Or if you like ...you can look up the number of folks in retirement that live below the poverty level, and the number barely above the poverty level.

More than half of the folks take SS before FRA , less than 4% take it at 70.
Indeed. Once source is Boston College which has been conducting research on retirement for quite awhile and has a lot of info.

https://crr.bc.edu/data/
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JoeRetire
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire »

smitcat wrote: Sat Aug 17, 2019 11:46 am "The most popular age to start benefits is 62. I believe that's often due to the "I want mine as soon as I can get it" philosophy, rather than actual need. That was certainly the case for several members of my extended family."
The most popular age to take SS is when you retire and/or lost your job - that is why most people take it as early as possible.
Then you must believe the most popular age to retire and/or lose your job is also 62.
"I disagree that the vast majority need the income early"
Looking at the typical persons and household savings when many folks lose their job and/or retire I think you will find that more than half do not have enough resources to fund anything substantial. The relationship between poor savings and preparations for retirement and/or loss of job late in life and taking SS as early as possible is real for most folks.
Those are exactly the people who should be delaying their higher-earner benefits as long as possible - preferably until 70. And unless they are physically unable, they should be working as well.

We apparently disagree on the percentage of people who cannot do either.
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JoeRetire
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire »

Chip Munk wrote: Sat Aug 17, 2019 3:05 pm
dcb wrote: Mon Aug 12, 2019 5:16 pm Have you considered taking your soc. sec at some age between62 - 64 and for your wife to apply for spousal benefits at her FRA. She would then receive half of your PIA until age 70 at which time she would apply for her own benefits. I am not sure what the procedures are for this scenario today, but it was pretty simple some 10 years ago when we did it.
Several posts on this thread and other social security threads on this forum suggest the spouse with the higher PIA wait until age 70 to secure the largest possible survivor benefit, while the spouse with the lower PIA collects before age 70, possibly even as early as age 62.

In my case, DH has the higher PIA and is eligible to file a restricted application and could be receiving spousal benefits now. I'm still several months away from my FRA and I'm having a tough time accepting the idea of settling for less than my PIA, even though the Open Social Security calculator recommends this approach for scenarios where DH passes away at age 88 or earlier.

But there is another issue. If DH passes away before age 68, my survivor benefit would be less than what I would have received on my own record if I waited until age 70. So I'm thinking I should wait to file until DH is at least age 67, so that if he doesn't make it to 68, I would be in the 12-month window to withdraw my application, pay back all benefits we both received, and take the survivor benefit while I delay my own benefit until age 70. Does that make sense?
Maybe. Check with https://opensocialsecurity.com/ using the Advanced Options and setting your husbands age of death appropriately.
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smitcat
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Re: Social Security -- Take it at 62, 67 or 70

Post by smitcat »

JoeRetire wrote: Sat Aug 17, 2019 8:20 pm
smitcat wrote: Sat Aug 17, 2019 11:46 am "The most popular age to start benefits is 62. I believe that's often due to the "I want mine as soon as I can get it" philosophy, rather than actual need. That was certainly the case for several members of my extended family."
The most popular age to take SS is when you retire and/or lost your job - that is why most people take it as early as possible.
Then you must believe the most popular age to retire and/or lose your job is also 62.
"I disagree that the vast majority need the income early"
Looking at the typical persons and household savings when many folks lose their job and/or retire I think you will find that more than half do not have enough resources to fund anything substantial. The relationship between poor savings and preparations for retirement and/or loss of job late in life and taking SS as early as possible is real for most folks.
Those are exactly the people who should be delaying their higher-earner benefits as long as possible - preferably until 70. And unless they are physically unable, they should be working as well.

We apparently disagree on the percentage of people who cannot do either.

"Then you must believe the most popular age to retire and/or lose your job is also 62."
No - its just the first opportunity for them to get access to the SS.
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JoeRetire
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire »

smitcat wrote: Sun Aug 18, 2019 6:36 am
JoeRetire wrote: Sat Aug 17, 2019 8:20 pm
smitcat wrote: Sat Aug 17, 2019 11:46 am "The most popular age to start benefits is 62. I believe that's often due to the "I want mine as soon as I can get it" philosophy, rather than actual need. That was certainly the case for several members of my extended family."
The most popular age to take SS is when you retire and/or lost your job - that is why most people take it as early as possible.
Then you must believe the most popular age to retire and/or lose your job is also 62.
"I disagree that the vast majority need the income early"
Looking at the typical persons and household savings when many folks lose their job and/or retire I think you will find that more than half do not have enough resources to fund anything substantial. The relationship between poor savings and preparations for retirement and/or loss of job late in life and taking SS as early as possible is real for most folks.
Those are exactly the people who should be delaying their higher-earner benefits as long as possible - preferably until 70. And unless they are physically unable, they should be working as well.

We apparently disagree on the percentage of people who cannot do either.

"Then you must believe the most popular age to retire and/or lose your job is also 62."
No - its just the first opportunity for them to get access to the SS.
LOL! That's exactly what I said!
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Re: Social Security -- Take it at 62, 67 or 70

Post by smitcat »

JoeRetire wrote: Sun Aug 18, 2019 7:04 am
smitcat wrote: Sun Aug 18, 2019 6:36 am
JoeRetire wrote: Sat Aug 17, 2019 8:20 pm
smitcat wrote: Sat Aug 17, 2019 11:46 am "The most popular age to start benefits is 62. I believe that's often due to the "I want mine as soon as I can get it" philosophy, rather than actual need. That was certainly the case for several members of my extended family."
The most popular age to take SS is when you retire and/or lost your job - that is why most people take it as early as possible.
Then you must believe the most popular age to retire and/or lose your job is also 62.
"I disagree that the vast majority need the income early"
Looking at the typical persons and household savings when many folks lose their job and/or retire I think you will find that more than half do not have enough resources to fund anything substantial. The relationship between poor savings and preparations for retirement and/or loss of job late in life and taking SS as early as possible is real for most folks.
Those are exactly the people who should be delaying their higher-earner benefits as long as possible - preferably until 70. And unless they are physically unable, they should be working as well.

We apparently disagree on the percentage of people who cannot do either.

"Then you must believe the most popular age to retire and/or lose your job is also 62."
No - its just the first opportunity for them to get access to the SS.
LOL! That's exactly what I said!
They lose the job at 60 - 1st access is at 62.
They lose their job at 59 - 1st access is 62.
They lose their job at XX - 1st access is 62.
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JoeRetire
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire »

smitcat wrote: Sun Aug 18, 2019 7:20 am They lose the job at 60 - 1st access is at 62.
They lose their job at 59 - 1st access is 62.
They lose their job at XX - 1st access is 62.
Ah, I see.

You are imagining so many people losing their jobs at 62 or earlier, not being able to find any work at all, and somehow surviving until 62, yet having no other alternative but to collect their benefits at 62, that it drives 62 to be the most likely age to collect.

Okay. We disagree.
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Re: Social Security -- Take it at 62, 67 or 70

Post by smitcat »

JoeRetire wrote: Sun Aug 18, 2019 7:23 am
smitcat wrote: Sun Aug 18, 2019 7:20 am They lose the job at 60 - 1st access is at 62.
They lose their job at 59 - 1st access is 62.
They lose their job at XX - 1st access is 62.
Ah, I see.

You are imagining so many people losing their jobs at 62 or earlier, not being able to find any work at all, and somehow surviving until 62, yet having no other alternative but to collect their benefits at 62, that it drives 62 to be the most likely age to collect.

Okay. We disagree.
AOK, we disagree
- Do we disagree on how much most people have saved for retirement at ages like 55-60?
- Do we disagree on what the average SS payout is?
- Do we disagree n how much the median income is in retirement by ager group after 60?
I believe these data points help to describe why many folks take SS as soon as possible.
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Re: Social Security -- Take it at 62, 67 or 70

Post by Big Dog »

smitcat:

there are plenty of data sources which show that the median savings for 60-somethings is <$200k. There is no doubt that folks take SS at age 62 bcos they have to.
By the time you reach 60, you should have eight times your annual salary saved, according to Fidelity, while those who are 67 should have 10 times their salary saved.

Unfortunately, Transamerica reports the estimated median savings for sixtysomethings is $172,000.

https://www.investopedia.com/articles/p ... e-2016.asp
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Re: Social Security -- Take it at 62, 67 or 70

Post by tibbitts »

JoeRetire wrote: Sun Aug 18, 2019 7:23 am
smitcat wrote: Sun Aug 18, 2019 7:20 am They lose the job at 60 - 1st access is at 62.
They lose their job at 59 - 1st access is 62.
They lose their job at XX - 1st access is 62.
Ah, I see.

You are imagining so many people losing their jobs at 62 or earlier, not being able to find any work at all, and somehow surviving until 62, yet having no other alternative but to collect their benefits at 62, that it drives 62 to be the most likely age to collect.

Okay. We disagree.
There is a difference between finding any work and finding work you are willing/able to do at age 62, which is generally a subset of work you are willing/able to do when younger. They may view collecting benefits to have the freedom to do things other than work in their '60s is more important than having more money to do things they may not be physically able to do at 70.
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire »

Big Dog wrote: Sun Aug 18, 2019 3:11 pm there are plenty of data sources which show that the median savings for 60-somethings is <$200k. There is no doubt that folks take SS at age 62 bcos they have to.
If they continue working, the don't have to.
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Re: Social Security -- Take it at 62, 67 or 70

Post by willthrill81 »

JoeRetire wrote: Sun Aug 18, 2019 6:04 pm
Big Dog wrote: Sun Aug 18, 2019 3:11 pm there are plenty of data sources which show that the median savings for 60-somethings is <$200k. There is no doubt that folks take SS at age 62 bcos they have to.
If they continue working, the don't have to.
True, but that may be a big 'if'.

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I personally view planning to reach financial independence by age ~65 to potentially be fraught with risk. There are too many things that can go wrong with not enough time and/or health to fix the problem(s).
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Big Dog
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Re: Social Security -- Take it at 62, 67 or 70

Post by Big Dog »

JoeRetire wrote: Sun Aug 18, 2019 6:04 pm
Big Dog wrote: Sun Aug 18, 2019 3:11 pm there are plenty of data sources which show that the median savings for 60-somethings is <$200k. There is no doubt that folks take SS at age 62 bcos they have to.
If they continue working, the don't have to.
Of course, but many of us don't have a choice. (Aged 65 here, and pushed out.)
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Re: Social Security -- Take it at 62, 67 or 70

Post by ananthar »

basspond wrote: Wed Jul 31, 2019 8:46 pm We will be taking at 62. We both have similar work history. Remember the government figures that on average the amount will be the same for whatever time you decide to take.
For a couple of the same age you have a valid argument, but SS does not descriminate based on sex, even though women tend to live longer than men by 7 years or more on average. So, even though the government figures that on average the amount will be the same regardless of age, this is NOT true for either men or women taken individually. For single men claiming at 62 is almost always the best option unless you have above average health AND are a non-smoker. Conversely for single women claiming at 70 is almost always the best option, unless you have below average health AND are a smoker.
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Re: Social Security -- Take it at 62, 67 or 70

Post by smitcat »

Big Dog wrote: Sun Aug 18, 2019 3:11 pm smitcat:

there are plenty of data sources which show that the median savings for 60-somethings is <$200k. There is no doubt that folks take SS at age 62 bcos they have to.
By the time you reach 60, you should have eight times your annual salary saved, according to Fidelity, while those who are 67 should have 10 times their salary saved.

Unfortunately, Transamerica reports the estimated median savings for sixtysomethings is $172,000.

https://www.investopedia.com/articles/p ... e-2016.asp
Thanks for the link - a while back on this site this topic was hashed out with many links to various things such as: incomes after 60 , unemployment at later ages, health and ability to get and perform jobs, and the resultant lack of options for folks later in life had they not saved earlier on.
It was pretty clear that many folks take SS early as they have no choice - not where I would want to be but its reality.
Looking up the income for households as people age (60-80) is also an eye opener as is reduces greatly in later years.
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Re: Social Security -- Take it at 62, 67 or 70

Post by smitcat »

ananthar wrote: Sun Aug 18, 2019 9:27 pm
basspond wrote: Wed Jul 31, 2019 8:46 pm We will be taking at 62. We both have similar work history. Remember the government figures that on average the amount will be the same for whatever time you decide to take.
For a couple of the same age you have a valid argument, but SS does not descriminate based on sex, even though women tend to live longer than men by 7 years or more on average. So, even though the government figures that on average the amount will be the same regardless of age, this is NOT true for either men or women taken individually. For single men claiming at 62 is almost always the best option unless you have above average health AND are a non-smoker. Conversely for single women claiming at 70 is almost always the best option, unless you have below average health AND are a smoker.
Also...the age you take SS does not solve for how many of those dollars you take that you can spend (after tax).
Dependent upon your age , savings, and married status taking SS later can add 'spendable' dollars due to:
- moving pre tax withdrawals to lower tax years
- allowing for Roth conversions
- lowering the total tax amount on all withdrawals and SS combined over the years.
Each situation is unique but in many cases waiting can allow one to have more 'spendable' dollars after taxes.
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Re: Social Security -- Take it at 62, 67 or 70

Post by #Cruncher »

basspond wrote: Wed Jul 31, 2019 8:46 pmRemember the government figures that on average the amount will be the same for whatever time you decide to take.
If by the "amount", you mean the discounted present value (PV), this may be true, basspond. For example, the PV of SS benefits for someone with a Normal Retirement Age (NRA) of 67 who lives until age 82, when discounted at 1.5%, is about the same whether benefits begin at age 62 or at age 70. (And the PV is roughly the same if benefits are started at any age between 62 and 70.) This is illustrated by the blue line second from the bottom of the following graph.

Image

However, keeping the discount rate at 1.5%, the present values will not be the same if benefits run for a much shorter or longer period. 20 years is the life expectancy of a 62 year old man according to the SSA 2016 Period Life Table. But according to this same mortality table the life expectancy of a 62 year old woman is 23 years. And also based on this same mortality table the life expectancy of at least one of a male / female couple both age 62 is 27 years. And the expectancy for both of the same couple being alive is 16 years. [1] The yellow, red, and purple lines graph the present values if benefits continue this long. It's apparent that they are not "the same for whatever time you decide to take".

The purple line at the top and the yellow line at the bottom pertain to the case of the high earner and the low earner of a couple deciding when each should start taking SS benefits. The higher benefit will continue while either is alive; but the lower benefit will continue only while both are alive. The two curves illustrate that it is generally better for the high earner to start at 70, and the low earner to start at 62.

Here are the figures upon which the graph is based:

Code: Select all

Row  Col A     Col B    Col C    Col D    Col E    Col F
  1  Born       1960
  2  NRA      67.000 
  3  PIA       1,000
  4  Rate       1.5%
  5  Die                 78       82       85       89
     Start   Pct PIA  ---------- Present Value ---------

Code: Select all

  7  62.00   70.000%  118,703  144,217  162,379  185,368
  8  62.25   71.250%  118,705  144,674  163,161  186,560
  9  62.50   72.500%  118,640  145,065  163,877  187,687
 10  62.75   73.750%  118,510  145,391  164,527  188,747
 11  63.00   75.000%  118,314  145,651  165,111  189,742
 12  63.25   76.250%  118,053  145,845  165,630  190,671
 13  63.50   77.500%  117,728  145,975  166,084  191,536
 14  63.75   78.750%  117,338  146,041  166,474  192,336
 15  64.00   80.000%  116,884  146,042  166,800  193,073 [2]
 16  64.25   81.667%  116,963  146,729  167,919  194,739
 17  64.50   83.333%  116,954  147,328  168,950  196,318
 18  64.75   85.000%  116,859  147,841  169,895  197,810
 19  65.00   86.667%  116,678  148,267  170,754  199,216
 20  65.25   88.333%  116,411  148,608  171,527  200,537
 21  65.50   90.000%  116,059  148,863  172,215  201,772
 22  65.75   91.667%  115,622  149,033  172,818  202,922
 23  66.00   93.333%  115,101  149,120  173,337  203,988
 24  66.25   95.000%  114,496  149,122  173,772  204,971
 25  66.50   96.667%  113,808  149,041  174,123  205,870
 26  66.75   98.333%  113,037  148,878  174,392  206,686
 27  67.00  100.000%  112,183  148,632  174,579  207,420
 28  67.25  102.000%  111,613  148,790  175,256  208,754
 29  67.50  104.000%  110,943  148,849  175,834  209,988
 30  67.75  106.000%  110,173  148,809  176,312  211,124
 31  68.00  108.000%  109,306  148,670  176,692  212,161
 32  68.25  110.000%  108,340  148,433  176,974  213,100
 33  68.50  112.000%  107,277  148,099  177,159  213,941
 34  68.75  114.000%  106,116  147,668  177,247  214,686
 35  69.00  116.000%  104,860  147,140  177,238  215,334
 36  69.25  118.000%  103,508  146,517  177,134  215,887
 37  69.50  120.000%  102,061  145,799  176,935  216,344
 38  69.75  122.000%  100,519  144,986  176,641  216,707
 39  70.00  124.000%   98,883  144,079  176,253  216,976
To run the figures for different assumptions, follow these steps: [3]
  • Select All, Copy, and Paste [4] the following at cell A1 of a blank Excel sheet:

    Code: Select all

    Born	1960
    NRA	=MIN(67,66+MAX(0,B1-1954)/6)
    PIA	1000
    Rate	0.015
    Die		78	82	85	89
    Start	Pct PIA	-------- Present Value --------
    62	=IF($A7<B$2,1-(5/900)*MIN(36,(B$2-$A7)*12)-(5/1200)*MAX(0,(B$2-$A7)*12-36),1+(8/1200)*($A7-B$2)*12)	=-PV($B$4,C$5-$A7,$B$3*$B7*12,0,0)/(1+$B$4)^($A7-62)
    62.25	=IF($A8<B$2,1-(5/900)*MIN(36,(B$2-$A8)*12)-(5/1200)*MAX(0,(B$2-$A8)*12-36),1+(8/1200)*($A8-B$2)*12)	=-PV($B$4,C$5-$A8,$B$3*$B8*12,0,0)/(1+$B$4)^($A8-62)
    =2*A8-A7	=IF($A9<B$2,1-(5/900)*MIN(36,(B$2-$A9)*12)-(5/1200)*MAX(0,(B$2-$A9)*12-36),1+(8/1200)*($A9-B$2)*12)	=-PV($B$4,C$5-$A9,$B$3*$B9*12,0,0)/(1+$B$4)^($A9-62)
  • Format for readability.
  • Copy cells C7:C9 right to column F.
  • Copy row 9 down to row 39.
  • Revise assumptions as needed in cells B1, B3, B4, and C5:F5.
Edit 8/24/2019 4:40 PM to add fourth line representing benefits continuing only until age 78. (16 year expectancy for both of an age 62 male / female couple being alive.)
  1. The life expectancy for either one of a couple is computed to be 26.97 years in cell I8 in the "Either" column on the "Alive" sheet of my Longevity Estimator spreadsheet. The life expectancy of both is computed to be 16.08 years and is shown in cell H8 in the "Both" column.
  2. Example calculation when benefit claimed at age 64 and runs until age 82 using the Excel PV function:
    146,042 = -PV(1.5%, 82 - 64, 80% * 12 * 1000, 0, 0) / 1.015 ^ (64 - 62)
  3. This spreadsheet is intended to illustrate how claiming age affects the present value of benefits. For actually choosing the claiming age that maximizes expected present value based on life expectancy, I recommend Mike Piper's (forum member ObliviousInvestor) Open Social Security calculator. (To correspond to my example, you need to check the [ ] Advanced Options box and revise the "Real Discount Rate" to 1.5%.)
  4. If you have trouble pasting, try "Paste Special" and "Text".
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Re: Social Security -- Take it at 62, 67 or 70

Post by Patent Guru »

dknightd wrote: Mon Aug 12, 2019 9:44 am OP only has 2 posts. But I'll give my opinion anyway. It is an opinion, likely based on wrong assumptions.

I'm 61 and recently retired. Spouse is 66+. Spouse is already taking SS (started at FRA). Spouse SS benefit is less than 1/2 of my FRA benefit.

I plan to take my SS benefits at 70. If I was single I might take them at 62. But for me maximizing spouse benefit for life overwhelms any short term benefit.

I could change my plans if things change.
Can your spouse get 1/2 Of your benefit when you start SS and stop his or her own SS payments at that time?
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Re: Social Security -- Take it at 62, 67 or 70

Post by Silk McCue »

Patent Guru wrote: Sun Aug 25, 2019 2:07 pm
dknightd wrote: Mon Aug 12, 2019 9:44 am OP only has 2 posts. But I'll give my opinion anyway. It is an opinion, likely based on wrong assumptions.

I'm 61 and recently retired. Spouse is 66+. Spouse is already taking SS (started at FRA). Spouse SS benefit is less than 1/2 of my FRA benefit.

I plan to take my SS benefits at 70. If I was single I might take them at 62. But for me maximizing spouse benefit for life overwhelms any short term benefit.

I could change my plans if things change.
Can your spouse get 1/2 Of your benefit when you start SS and stop his or her own SS payments at that time?
In that case the spouse would continue to receive their benefit (it doesn't stop) and get an additional spousal benefit to bring their total benefit to 50% of their partner. You can play with these scenarios using opensocialsecurity.com

Cheers
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Re: Social Security -- Take it at 62, 67 or 70

Post by Patent Guru »

Silk McCue wrote: Sun Aug 25, 2019 2:41 pm
Patent Guru wrote: Sun Aug 25, 2019 2:07 pm
dknightd wrote: Mon Aug 12, 2019 9:44 am OP only has 2 posts. But I'll give my opinion anyway. It is an opinion, likely based on wrong assumptions.

I'm 61 and recently retired. Spouse is 66+. Spouse is already taking SS (started at FRA). Spouse SS benefit is less than 1/2 of my FRA benefit.

I plan to take my SS benefits at 70. If I was single I might take them at 62. But for me maximizing spouse benefit for life overwhelms any short term benefit.

I could change my plans if things change.
Can your spouse get 1/2 Of your benefit when you start SS and stop his or her own SS payments at that time?
In that case the spouse would continue to receive their benefit (it doesn't stop) and get an additional spousal benefit to bring their total benefit to 50% of their partner. You can play with these scenarios using opensocialsecurity.com

Cheers
Thank you.
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Re: Social Security -- Take it at 62, 67 or 70

Post by marielake »

Stuff happens.

I retired at 65 (with a pension that just about covered my expenses) thinking I'd take SS at 70. The more I thought about it, I came to the conclusion that I'd been saving for retirement for more than 30+ yrs, had lived frugally enough and began to wonder what I was saving for. I ended up taking SS at 66. Now, when I look at the spreadsheet, I think that may have been a mistake (for tax purposes only). I used my SS to buy a second home and could not be happier with my choice. I'm trying to convince myself "don't let taxes wag the dog" was a good decision. Its a weird place to be.
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire »

Big Dog wrote: Sun Aug 18, 2019 8:41 pm
JoeRetire wrote: Sun Aug 18, 2019 6:04 pm
Big Dog wrote: Sun Aug 18, 2019 3:11 pm there are plenty of data sources which show that the median savings for 60-somethings is <$200k. There is no doubt that folks take SS at age 62 bcos they have to.
If they continue working, the don't have to.
Of course, but many of us don't have a choice. (Aged 65 here, and pushed out.)
Folks 65 can still find a new job if they want to or need to.
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Re: Social Security -- Take it at 62, 67 or 70

Post by Big Dog »

JoeRetire wrote: Mon Aug 26, 2019 8:48 pm
Big Dog wrote: Sun Aug 18, 2019 8:41 pm
JoeRetire wrote: Sun Aug 18, 2019 6:04 pm
Big Dog wrote: Sun Aug 18, 2019 3:11 pm there are plenty of data sources which show that the median savings for 60-somethings is <$200k. There is no doubt that folks take SS at age 62 bcos they have to.
If they continue working, the don't have to.
Of course, but many of us don't have a choice. (Aged 65 here, and pushed out.)
Folks 65 can still find a new job if they want to or need to.
That's true, and is why I've been making friends with the local SBUX manager.
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Re: Social Security -- Take it at 62, 67 or 70

Post by rich126 »

marielake wrote: Mon Aug 26, 2019 8:35 pm Stuff happens.

I retired at 65 (with a pension that just about covered my expenses) thinking I'd take SS at 70. The more I thought about it, I came to the conclusion that I'd been saving for retirement for more than 30+ yrs, had lived frugally enough and began to wonder what I was saving for. I ended up taking SS at 66. Now, when I look at the spreadsheet, I think that may have been a mistake (for tax purposes only). I used my SS to buy a second home and could not be happier with my choice. I'm trying to convince myself "don't let taxes wag the dog" was a good decision. Its a weird place to be.
People here often can’t get away from the numbers. I’d rather have the use of additional funds while younger and healthy enough to do stuff than have too much money at an age where I am unable to do so. I don’t know what I will do but it isn’t going to be about numbers.

I’ve generally been healthy in my life but hurt my back in March and it still isn’t right. I’m hopeful it will get better but if not at least I know I did a bunch of travel the last decade and saw things on my bucket list. And maybe my views are tainted by my parents. While my two grandmothers live to 100+ and one grandfather was late 80s my mother developed a very rare condition with no chance of cure and basically got progressively worse until her death 10 years later at 72. My father’s prime retirement years were spent taking care of my mother. Not exactly what he hoped for.

I’d rather enjoy the money when I can and cut back later, if needed. And, as I age, I’m realizing your biggest regrets are often things you didn’t do and not things you did.
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire »

Big Dog wrote: Mon Aug 26, 2019 9:33 pm
JoeRetire wrote: Mon Aug 26, 2019 8:48 pm
Big Dog wrote: Sun Aug 18, 2019 8:41 pm
JoeRetire wrote: Sun Aug 18, 2019 6:04 pm
Big Dog wrote: Sun Aug 18, 2019 3:11 pm there are plenty of data sources which show that the median savings for 60-somethings is <$200k. There is no doubt that folks take SS at age 62 bcos they have to.
If they continue working, the don't have to.
Of course, but many of us don't have a choice. (Aged 65 here, and pushed out.)
Folks 65 can still find a new job if they want to or need to.
That's true, and is why I've been making friends with the local SBUX manager.
Starbucks is just one option. There are many, many others. In this economy, if you are capable of working, you can find a job if you actually want one.
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire »

rich126 wrote: Mon Aug 26, 2019 11:00 pm I’d rather enjoy the money when I can and cut back later, if needed.
If you are single, that's a reasonable choice. If you are the higher earner and have a potentially longer living spouse, then there are other consideration.
And, as I age, I’m realizing your biggest regrets are often things you didn’t do and not things you did.
Unless you don't have enough money. Then you have far different regrets.

Sometimes numbers actually matter.
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Re: Social Security -- Take it at 62, 67 or 70

Post by smitcat »

JoeRetire wrote: Tue Aug 27, 2019 6:27 am
Big Dog wrote: Mon Aug 26, 2019 9:33 pm
JoeRetire wrote: Mon Aug 26, 2019 8:48 pm
Big Dog wrote: Sun Aug 18, 2019 8:41 pm
JoeRetire wrote: Sun Aug 18, 2019 6:04 pm

If they continue working, the don't have to.
Of course, but many of us don't have a choice. (Aged 65 here, and pushed out.)
Folks 65 can still find a new job if they want to or need to.
That's true, and is why I've been making friends with the local SBUX manager.
Starbucks is just one option. There are many, many others. In this economy, if you are capable of working, you can find a job if you actually want one.
"Starbucks is just one option. There are many, many others. In this economy, if you are capable of working, you can find a job if you actually want one"
While that is true for us it is also true that many older workers are caring for a spouse and/or cannot get work that would make sense to take.
They either cannot physically do what is required for the hours required or they will earn a pay low enough that traveling to work is less likely to help their situation.
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Re: Social Security -- Take it at 62, 67 or 70

Post by MandyT »

rich126 wrote: Mon Aug 26, 2019 11:00 pm I’d rather enjoy the money when I can and cut back later, if needed. And, as I age, I’m realizing your biggest regrets are often things you didn’t do and not things you did.
It seems as if you are equating "claiming SS earlier" with "spending more money earlier". This does not necessarily have to be the case.

Here's a link to a thread that was cited upthread, but is worth pointing out again:

Delay Social Security to age 70 and Spend more money at 62

So one possibility is to spend more out of one's portfolio early on and have a significantly higher monthly payout in the event of a long life.

In these threads, proponents of early SS frequently say things like, "You all think you're going to live to be 100!" To me, it's more a matter of trying to be prepared for a long life rather than expecting it. My aim isn't to claim SS at the exact time to maximize my expected value--it's to get the most value out of it in the cases when I'm most likely to need it, which would be if I live past 90.

I'm 57 now. I'm a math person, but I haven't really drilled down into detailed budgeting aside from looking at the broad strokes, running some simulations, and feeling that my finances are in good shape for all not-unreasonable outcomes. I'm frugal by nature, and my approach to comforts and luxuries is "I can afford anything, but I can't afford everything". If I die suddenly in 10 years without having claimed SS, I will not have deprived myself of anything I really wanted. If I get a dire medical diagnosis in 5 years, I can always decide to claim SS. But, on the off-chance that I live to be 95, the increased, inflation-adjusted monthly stream will prove useful.

(Could SS go awry between now and then? Sure, but I have to think that maintaining benefits for nonagenarians without significant assets would be a priority.)
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire »

smitcat wrote: Tue Aug 27, 2019 8:17 am
JoeRetire wrote: Tue Aug 27, 2019 6:27 am
Big Dog wrote: Mon Aug 26, 2019 9:33 pm
JoeRetire wrote: Mon Aug 26, 2019 8:48 pm
Big Dog wrote: Sun Aug 18, 2019 8:41 pm

Of course, but many of us don't have a choice. (Aged 65 here, and pushed out.)
Folks 65 can still find a new job if they want to or need to.
That's true, and is why I've been making friends with the local SBUX manager.
Starbucks is just one option. There are many, many others. In this economy, if you are capable of working, you can find a job if you actually want one.
"Starbucks is just one option. There are many, many others. In this economy, if you are capable of working, you can find a job if you actually want one"
While that is true for us it is also true that many older workers are caring for a spouse and/or cannot get work that would make sense to take.
They either cannot physically do what is required for the hours required or they will earn a pay low enough that traveling to work is less likely to help their situation.
It's fine to imagine all sorts of situations.
But the one I was actually responding to was "Aged 65 here, and pushed out." No sign of a requirement to care for a spouse or being physically unable to work.

There are plenty of jobs for someone aged 65 who was working recently and still wants to work.
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Re: Social Security -- Take it at 62, 67 or 70

Post by rgs92 »

Just bumping this thread for comments.
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Re: Social Security -- Take it at 62, 67 or 70

Post by Silk McCue »

rgs92 wrote: Mon Mar 16, 2020 1:00 pm Just bumping this thread for comments.
We have 7 pages of comments on this 7 months dormant thread. What are you hoping for in terms of further answers and opinions?

We have a never ending number of threads on this subject. After you read this entire thread and still have questions you should use the search bar for more reading.

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Re: Social Security -- Take it at 62, 67 or 70

Post by rgs92 »

OK, point taken, thanks.
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Re: Social Security -- Take it at 62, 67 or 70

Post by namajones »

jfave33 wrote: Wed Jul 31, 2019 10:56 pm At the end of the day the decision when to take social security is a gamble. You don't know when you will die. That is why it is good to think of it as longevity insurance for both you and your spouse. The biggest risk is running out of money in old age. It is a nasty risk and is something I want to minimise. If you think of it like this then it is better to delay until 70. A lot of people focus on the risk of not getting the maximum amount possible. Which is a pretty tame risk in my opinion not worth worrying about. It is also something you can't control and will only know when it is too late.
A confounding factor is what will happen to social security payouts over the next decade or two. This is yet another unknown. If you are SS-eligible now but are waiting and if SS gets cut by, say, 25 percent before you hop on the bus (or after), then you will have missed out on more money or it will take you longer to collect the same amount had you started sooner.

There are those who are not realistically in danger of running out of money late in life but simply want to get as much as they can from the system in order to enjoy life more now or to take some strain off their savings or investments. If there are not spousal concerns--which to my mind are the most compelling reason to wait--then there's a good case to be made for taking SS at 62. At that point, longevity-wise, you've already "won the game," to my mind (since I know so many who died young), so use the money to enjoy life while you still have the energy to climb mountains, so to speak.
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Re: Social Security -- Take it at 62, 67 or 70

Post by Stubbie »

namajones wrote: Fri Jun 25, 2021 6:50 am
jfave33 wrote: Wed Jul 31, 2019 10:56 pm At the end of the day the decision when to take social security is a gamble. You don't know when you will die. That is why it is good to think of it as longevity insurance for both you and your spouse. The biggest risk is running out of money in old age. It is a nasty risk and is something I want to minimise. If you think of it like this then it is better to delay until 70. A lot of people focus on the risk of not getting the maximum amount possible. Which is a pretty tame risk in my opinion not worth worrying about. It is also something you can't control and will only know when it is too late.
A confounding factor is what will happen to social security payouts over the next decade or two. This is yet another unknown. If you are SS-eligible now but are waiting and if SS gets cut by, say, 25 percent before you hop on the bus (or after), then you will have missed out on more money or it will take you longer to collect the same amount had you started sooner.

There are those who are not realistically in danger of running out of money late in life but simply want to get as much as they can from the system in order to enjoy life more now or to take some strain off their savings or investments. If there are not spousal concerns--which to my mind are the most compelling reason to wait--then there's a good case to be made for taking SS at 62. At that point, longevity-wise, you've already "won the game," to my mind (since I know so many who died young), so use the money to enjoy life while you still have the energy to climb mountains, so to speak.
Good point. If I was single, being a male of the species, I would probably consider taking it early. However this would also greatly hinder the amount of money available for tax free Roth conversions before age 70.
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Re: Social Security -- Take it at 62, 67 or 70

Post by spectec »

willthrill81 wrote: Wed Jul 31, 2019 8:56 pm I find it funny that when people are talking about claiming SS benefits, they portray their remaining life expectancy as being very short. But when people talk about safe withdrawal rates, they portray themselves living to age 95 or older. :D

After having read a lot about this issue, my conclusion is that the 'best' strategy can usually be closely approximated as follows: delay SS as long as you can, but if you really need the benefits, just claim them. This seems to balance the use of SS benefits as longevity insurance with current spending needs fairly well.
Excellent perspective, and excellent conclusion.

For me, the risk of outliving one's assets always overrides the risk of leaving some $ on the table if one dies earlier than their life expectancy. I delayed beginning SocSec until FRA (66), but did not wait until 70. Now, at 73 it would be easy to regret not delaying those extra 4 years. But there's no right or wrong answer at this point - I'll know in about 10 years if I made the wrong decision (or my heirs will know I made the right one).
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Re: Social Security -- Take it at 62, 67 or 70

Post by cbeck »

There is hardly any exercise more pointless than calculating present value of your SS benefits based on some arbitrarily chosen date of death. There is no rational decision that could be based on such a calculation. To do so ignores the single most valuable component of the SS annuity, that you cannot outlive it. The SSA, or any other insurance company, can calculate the lifespan of a cohort of annuitants to a high degree of accuracy due to the Law of Large Numbers. For you and me planning for our n = 1 future, expected life spans are completely useless. The only recourse we have is to plan for the worst outcome financially, which is the longest life.
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Re: Social Security -- Take it at 62, 67 or 70

Post by gubernaculum »

70. That is a no brainer.
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Re: Social Security -- Take it at 62, 67 or 70

Post by sc9182 »

gubernaculum wrote: Sat Jun 26, 2021 8:34 pm 70. That is a no brainer.
Assuming you still alive, and having 2-3 square meals a day between retirement and age 70 (and prolly 14+ years afterwards for break even) — yeah, could make sense. Get some insurance till age 84, so your delay-SS process could come truly out ahead :-)
Last edited by sc9182 on Sat Jun 26, 2021 9:07 pm, edited 1 time in total.
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Re: Social Security -- Take it at 62, 67 or 70

Post by RoadagentMN »

62 for us is a no brainer - both myself and wife have cola adjusted pensions and very well funded pretax accounts. We can live on our pensions and let the pretax roll until RMD time. SS is just bonus cash - take the money and run. SS dies with us, my Roth, 401 and 457 can live on in some form within our family trust.
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Re: Social Security -- Take it at 62, 67 or 70

Post by namajones »

cbeck wrote: Sat Jun 26, 2021 7:30 pm The only recourse we have is to plan for the worst outcome financially, which is the longest life.
I'm a plan for the worst kind of person, but for me the worst would be not enjoying the extra cash of SS while still young enough to be active. If I live a long life, fine, okay. I'll have enough. But the extra cash of SS at 62 will make me feel free enough in early retirement so that I won't worry about how much I was taking from savings and/or investments in order to bridge the gap between 62 and 70. It's another income stream that will take some stress off of my other income streams.

Tons of money coming in after 70, at a point in life when my primary goal will probably not be climbing the Alps but remembering to take my pills? Nah. That's just silly.
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Re: Social Security -- Take it at 62, 67 or 70

Post by bberris »

There's been plenty of posts that give the reasons why you would have more money to spend at 62 by delaying claiming to 70.
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire »

cbeck wrote: Sat Jun 26, 2021 7:30 pmThe only recourse we have is to plan for the worst outcome financially, which is the longest life.
Obviously, that's not the only recourse.

Some folks apparently value "bird in hand" more than being prepared for the worst financial outcome. While it's not one I agree with, that's their recourse to choose.
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Re: Social Security -- Take it at 62, 67 or 70

Post by Gaston »

Lots of great comments in this thread. Another big unknown is whether the US government will change the rules in coming years. So plan as best you can, and make the decision that is right for you.
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Re: Social Security -- Take it at 62, 67 or 70

Post by namajones »

Gaston wrote: Sun Jun 27, 2021 7:25 am Lots of great comments in this thread. Another big unknown is whether the US government will change the rules in coming years. So plan as best you can, and make the decision that is right for you.
This is actually huge, at least for someone like me, who could delay on the promise of a decent chunk of additional funds only to find that, right about the time I'm ready to take those decent funds, they're not so decent anymore--by about the same percentage that I was supposed to gain by waiting.

When someone tells you, "hey, I'll give you 50 dollars a month today but 80 a month if you wait another 8 years," why are they telling you that? Cuz you might die in the next 8 years? Check. Cuz you might die a few years after starting to collect the bigger chunk of cash? Check. Cuz they might change the rules and not actually pay you the 80 in 8 years? Check.

Hmm.

Yeah, if the SS part of your income streams is uber important to you, then you're pretty much stuck with waiting to maximize that part of your income (and hoping the rules don't change before you can collect that bigger check).

Otherwise, though, to quote Steve Miller, "take the money and run."
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Re: Social Security -- Take it at 62, 67 or 70

Post by #Cruncher »

Gaston wrote: Sun Jun 27, 2021 7:25 amAnother big unknown is whether the US government will change the rules in coming years. So plan as best you can, and make the decision that is right for you.
This issue of SS benefits possibly being reduced in the future is often discussed on the forum. If such a reduction does occur, its effect on best claiming age depends on the year one was born as well as the year and size of the reduction.

For example, if the reduction occurs in 2034 consider its effect if one was born in 1964 or 1972.
  • 1964: One will turn 70 in the year of the reduction. If one claims SS at age 62, one will get 8 years of the regular benefit before the reduction kicks in. But if one doesn't claim until age 70, one will get none of the regular benefits. The reduction is therefore a reason to claim early.
  • 1972: One will turn 62 in the year of the reduction. Whether one claims at 62 or 70, one will get no years with the regular benefit. Every year will get the reduced benefits. Therefore the reduction has no effect on claiming strategy. I.e., the best age to claim will be the same as if no reduction occurs at all.
Here is a table that shows the effect of a 23% reduction in 2034 on the relative benefits of claiming at age 70 versus age 62. (These are the default year and percent in the Open Social Security calculator if one chooses to assume a "Possible Future Cut".) For example, the table shows that if one was born in 1964 and lives to age 82, one will collect 5% less in benefits by claiming at 70 than at 62. But if one was born in 1972 or later and lives to age 82, one will collect 6% more by delaying to age 70.

Code: Select all

 Reduction year      2034
Reduced percent       23%
          Start     Early    Late
            Age        62      70
Initial benefit     70.00  124.00
Reduced benefit     53.90   95.48
        Die age                76     78     80     82     84     86
                 Reduction     Difference Claim at 70 vs Claim at 62
      Year Born        Age    ---------------------------------------

Code: Select all

         [ 1960 ]       74    -28%   -17%    -8%  [ -1% ]  +5%   +10% [1]
           1961         73    -29%   -18%    -9%    -2%    +4%   +10%
           1962         72    -31%   -20%   -11%    -3%    +3%    +9%
           1963         71    -33%   -21%   -12%    -4%    +3%    +8%
         [ 1964 ]       70    -35%   -23%   -13%  [ -5% ]  +2%    +7% [2]
           1965         69    -34%   -22%   -12%    -4%    +3%    +9%
           1966         68    -33%   -20%   -10%    -2%    +4%   +10%
           1967         67    -31%   -19%    -9%    -1%    +6%   +11%
           1968         66    -30%   -18%    -8%    +0%    +7%   +12%
           1969         65    -29%   -16%    -6%    +2%    +8%   +14%
           1970         64    -27%   -15%    -5%    +3%   +10%   +15%
           1971         63    -26%   -13%    -3%    +5%   +11%   +17%
         [ 1972 ]       62    -24%   -11%    -2%  [ +6% ] +13%   +18% [3]
  1. If born in 1960 and die in 2042 at age 82:

    Code: Select all

                               Claim 62   Claim 70
    Year claim                     2022       2030
    Years collect before 2034        12          4
    Years collect after 2034          8          8
    Benefits before 2034         840.00     496.00
    Benefits after 2034          431.20     763.84
    Total benefits             1,271.20   1,259.84
    Age 70 vs age 62                         -0.9%
  2. If born in 1964 and die in 2046 at age 82:

    Code: Select all

                               Claim 62   Claim 70
    Year claim                     2026       2034
    Years collect before 2034         8          0
    Years collect after 2034         12         12
    Benefits before 2034         560.00       0.00
    Benefits after 2034          646.80   1,145.76
    Total benefits             1,206.80   1,145.76
    Age 70 vs age 62                         -5.1%
  3. If born in 1972 and die in 2054 at age 82:

    Code: Select all

                               Claim 62   Claim 70
    Year claim                     2034       2042
    Years collect before 2034         0          0
    Years collect after 2034         20         12
    Benefits before 2034           0.00       0.00
    Benefits after 2034        1,078.00   1,145.76
    Total benefits             1,078.00   1,145.76
    Age 70 vs age 62                         +6.3%
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JoeRetire
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire »

namajones wrote: Sun Jun 27, 2021 8:11 am
Gaston wrote: Sun Jun 27, 2021 7:25 am Lots of great comments in this thread. Another big unknown is whether the US government will change the rules in coming years. So plan as best you can, and make the decision that is right for you.
This is actually huge, at least for someone like me, who could delay on the promise of a decent chunk of additional funds only to find that, right about the time I'm ready to take those decent funds, they're not so decent anymore--by about the same percentage that I was supposed to gain by waiting.
Or the rules could be changed so that the advantage gained by delaying is even more than it is today.
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire »

#Cruncher wrote: Sun Jun 27, 2021 2:38 pm
Gaston wrote: Sun Jun 27, 2021 7:25 amAnother big unknown is whether the US government will change the rules in coming years. So plan as best you can, and make the decision that is right for you.
This issue of SS benefits possibly being reduced in the future is often discussed on the forum. If such a reduction does occur, its effect on best claiming age depends on the year one was born as well as the year and size of the reduction.
It's not quite that simple. The rules could be changed in any number of ways.

You are positing a reduction that will occur if the rules are NOT changed in any way.
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Re: Social Security -- Take it at 62, 67 or 70

Post by Silk McCue »

JoeRetire wrote: Sun Jun 27, 2021 3:38 pm
#Cruncher wrote: Sun Jun 27, 2021 2:38 pm
Gaston wrote: Sun Jun 27, 2021 7:25 amAnother big unknown is whether the US government will change the rules in coming years. So plan as best you can, and make the decision that is right for you.
This issue of SS benefits possibly being reduced in the future is often discussed on the forum. If such a reduction does occur, its effect on best claiming age depends on the year one was born as well as the year and size of the reduction.
It's not quite that simple. The rules could be changed in any number of ways.

You are positing a reduction that will occur if the rules are NOT changed in any way.
#Cruncher's analysis was based specifically on them not being changed beyond the proposed reduction so that impacts and considerations could be explored. It is that simple.

If you want to explore and analyze the endless ways in which they could change please post away.

Cheers
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Re: Social Security -- Take it at 62, 67 or 70

Post by burt »

Ohhh hell..... 62 seems early, 70 seems late.
If no one can agree, I guess it's a moot point.
I'll take it at my FRA 66 + 2 months.
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Re: Social Security -- Take it at 62, 67 or 70

Post by cbeck »

namajones wrote: Sat Jun 26, 2021 9:31 pm
cbeck wrote: Sat Jun 26, 2021 7:30 pm The only recourse we have is to plan for the worst outcome financially, which is the longest life.
I'm a plan for the worst kind of person, but for me the worst would be not enjoying the extra cash of SS while still young enough to be active. If I live a long life, fine, okay. I'll have enough. But the extra cash of SS at 62 will make me feel free enough in early retirement so that I won't worry about how much I was taking from savings and/or investments in order to bridge the gap between 62 and 70. It's another income stream that will take some stress off of my other income streams.

Tons of money coming in after 70, at a point in life when my primary goal will probably not be climbing the Alps but remembering to take my pills? Nah. That's just silly.
In fact, the opposite is probably true. If you had planned out your entire retirement right up to the latest possible day, then it would be clear that by delaying SS and thereby ensuring a permanently higher payout beginning at 70, then that would free you up to spend more of your other income/assets during your young old age and thereafter without endangering your standard of living.

I did my pre-retirement planning using Esplanner which attempts to account for every variable including rate of return, inflation, federal and state taxes, SS from any start date, home ownership/rental, relocation, special expenses, inheritance, legacy intention, etc. By running different scenarios (what if I move to a no-income-tax state, what if I sell my house and rent, what if I live to 105, etc.) and comparing the results Esplanner gives a feel for the relative impact of each decision within the big picture. The key item in its output is "discretionary spending," which is what you can afford to spend after paying for certain basic cost of living expenses such as taxes, housing, insurance, etc. while maintaing the same standard of living. The scenarios that generate more discretionary spending, based on your own assumptions as to rate of return, inflation, etc., are the better ones. Esplanner also shows the amounts of each asset for each year until the "end of plan." So, when I evaluated this panoramic view of the remainder of my financial life, it was clear that delaying SS until 70 together with moving to a lower cost of living area, provided a significant increase in my expected discretionary spending for the rest of my life.
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