When to take Social Security

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Dkells4
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When to take Social Security

Post by Dkells4 »

Ok I'm a few years out before Retirement and having conversations regarding Social Security. My plan is to wait til I'm 70 and get the extra $1000. per month vs taking it at 66 and 2 months. The question is do any of you feel that Uncle Sam may change the rules effecting Soc Security and if I take it at 66 and 2 months I'd be Grandfathered in and exempt from any changes. I know this may sound crazy; but nowadays I feel that in this crazy world anything can happen.
Thanks for your thoughts.
David
Patzer
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Re: When to take Social Security

Post by Patzer »

I think you should wait until 70 if you can afford to.

There is no guarantee that you would be grandfathered in if the rules changed.

If a law about changing the rules was being debated, that would probably give you several months of lead time to act, before any such law passed.
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Re: When to take Social Security

Post by Big Dog »

Check out OpenSocialSecurity.

https://opensocialsecurity.com
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ruralavalon
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Re: When to take Social Security

Post by ruralavalon »

Dkells4 wrote: Wed Apr 14, 2021 6:48 pm Ok I'm a few years out before Retirement and having conversations regarding Social Security. My plan is to wait til I'm 70 and get the extra $1000. per month vs taking it at 66 and 2 months. The question is do any of you feel that Uncle Sam may change the rules effecting Soc Security and if I take it at 66 and 2 months I'd be Grandfathered in and exempt from any changes. I know this may sound crazy; but nowadays I feel that in this crazy world anything can happen.
Thanks for your thoughts.
David
I have no idea whether Congress will change the law. We get a new Congress every two years, so it's hard to guess what people who haven't been elected yet might want to do.

In general if in good health it's usually better to wait to start Social Security.
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Re: When to take Social Security

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) forum (Social Security).
Dkells4 wrote: Wed Apr 14, 2021 6:48 pm ...The question is do any of you feel that Uncle Sam may change the rules effecting Soc Security...
For the record, Social Security is authorized under US law (legislation). Speculation about future legislation (what "might" happen) is prohibited by forum policy, see: Unacceptable Topics
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The whole point of the policy is to (1) eliminate contentious disagreements that result from these discussions and (2) keep investors from making bad decisions. Proposed legislation changes many times between the time it's introduced and signed into law.

We do permit discussions which plan for reductions in Social Security, but not about the future of Social Security itself (political conjecture).
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JoeRetire
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Re: When to take Social Security

Post by JoeRetire »

Dkells4 wrote: Wed Apr 14, 2021 6:48 pmThe question is do any of you feel that Uncle Sam may change the rules effecting Soc Security and if I take it at 66 and 2 months I'd be Grandfathered in and exempt from any changes.
Uncle Sam may change the rules in some way that you wouldn't like.
You may be grandfathered so that the changes don't affect you.

Or not.

One thing is certain: if you delay until 70 you will maximize your monthly benefits under the current rules. And if you have a lower-earning spouse, delaying your benefits until 70 will maximize eventual survivor benefits under the current rules.

Everything else is pure speculation.

For me, I plan using the current rules until they actually change, not some unspecified rule changes with the added speculation that grandfathering might prevent their impact.
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123
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Re: When to take Social Security

Post by 123 »

If you have concerns about "rule changes" for Social Security you should likely take benefits as early as possible. If the rules change they can't take away what you have already received.
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Re: When to take Social Security

Post by humblecoder »

Dkells4 wrote: Wed Apr 14, 2021 6:48 pm Ok I'm a few years out before Retirement and having conversations regarding Social Security. My plan is to wait til I'm 70 and get the extra $1000. per month vs taking it at 66 and 2 months. The question is do any of you feel that Uncle Sam may change the rules effecting Soc Security and if I take it at 66 and 2 months I'd be Grandfathered in and exempt from any changes. I know this may sound crazy; but nowadays I feel that in this crazy world anything can happen.
Thanks for your thoughts.
David
Yes, it sounds crazy to ask. Anybody who gives you an opinion on this has no clue. They essentially are pulling their opinion out of a certain dark and smelly place that shall not be named. If you take any actions solely based upon said opinions, then you are as foolish as the fools offering an opinion on things that they know nothing about.

I would use Open Social Security to help you evaluate options, and make a decision based upon that, your expected health, your retirement needs... the usual factors.

Sorry for the tough love, but you asked for thoughts. So there's mine.

EDIT: You mention something about "being grandfathered in". That is also foolish speculation. There is nothing in the US Constitution which says "thou shalt be grandfathered into your Social Security" as far as I know. That said, I am not a Constitutional lawyer so I may have missed that particular clause. :D
Last edited by humblecoder on Wed Apr 14, 2021 8:54 pm, edited 1 time in total.
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Bogle7
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Re: When to take Social Security

Post by Bogle7 »

What is your scheduled death date?
The “when” is trivial after that.
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Colorado Guy
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Re: When to take Social Security

Post by Colorado Guy »

Dkells4 wrote: Wed Apr 14, 2021 6:48 pm Ok I'm a few years out before Retirement and having conversations regarding Social Security. My plan is to wait til I'm 70 and get the extra $1000. per month vs taking it at 66 and 2 months. The question is do any of you feel that Uncle Sam may change the rules effecting Soc Security and if I take it at 66 and 2 months I'd be Grandfathered in and exempt from any changes. I know this may sound crazy; but nowadays I feel that in this crazy world anything can happen.
Thanks for your thoughts.
David
You're a few years out, so you can plan and, if necessary, make changes based on what is better known in a couple of years. Running opensocialsecurity models for different retirement scenarios will help you evaluate your options. For my case, the difference in lifetime benefits between taking it at 69 and 70 are not that significant (purely a subjective evaluation which could change), affecting my own thinking. Of course, you need your scheduled death date for accuracy. :(

While not speculating about what the laws/rules/regulations will be in a few years, I find it hard to believe that the bureaucrats and lawmakers truly want the publicity of an army of old folks in wheelchairs and hospital beds storming the capital, demanding their Social Security benefits be restored. But then again, I'm not a government employee!
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vanbogle59
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Re: When to take Social Security

Post by vanbogle59 »

The SSA has an army of highly-paid actuaries who actively try to set things up so it doesn't matter (on average) when you take your withdrawals.

Are an outlier to their "average"?
If yes, go with that.
If no, unless those guys are bad at their jobs, it doesn't matter what you decide (on average).
Johm221122
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Re: When to take Social Security

Post by Johm221122 »

123 wrote: Wed Apr 14, 2021 8:25 pm If you have concerns about "rule changes" for Social Security you should likely take benefits as early as possible. If the rules change they can't take away what you have already received.
Exactly why couldn't they? Plus the rules would never change quickly
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grabiner
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Re: When to take Social Security

Post by grabiner »

vanbogle59 wrote: Thu Apr 15, 2021 9:53 pm The SSA has an army of highly-paid actuaries who actively try to set things up so it doesn't matter (on average) when you take your withdrawals.
This is not the case, for several reasons. The formula has not changed in years, so it was based on shorter life expectancies. And because the benefit for every year you wait is the same dollar amount, waiting longer becomes less valuable because it gives you a lower percentage gain for fewer years. If your FRA is 66 and your benefit at 66 would be $20,000, waiting until 67 gives you $21,600, an 8% increase. Waiting until 68 gives you $23,200, which is an 8% increase based on the age-66 benefit but only 7.4% of the age-67 benefit, and you get the extra benefit for one less year.

The net effect is that single men of average life expectancy maximize their expected value by claiming at 68 or 69, depending on interest rates; the benefit at age 69, if invested in TIPS (since SS is indexed to inflation), will cover the difference between age-69 and age-70 benefits for longer than the benefit is expected to last. (Even then, waiting may be desirable, since it gives you more money if you have more time to need it for spending.) Men of above-average life expectancy, women of average life expectancy, and anyone with a lower-earning spouse maximizes expected value by waiting all the way until 70.
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vanbogle59
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Re: When to take Social Security

Post by vanbogle59 »

"This is not the case, for several reasons." - I'm listening

"The formula has not changed in years" - agreed
"so it was based on shorter life expectancies." - Um, maybe. Not so sure. US life expectancy is not exactly sky-rocketing. Has the needle actually moved?

"And..." - now you list all they stuff the actuaries actually built to encourage delay :-)

"The net effect is that single men of average life expectancy maximize their expected value by claiming at 68 or 69," - I am full age at 67+, so this is trivial....

"Men of above-average life expectancy," - Not to quibble, but it's the actual longer life, not the expectancy that matters. Nevertheless, if you are an exception...

"women of average life expectancy" - This may be a genuine free lunch. I'm not sure

"and anyone with a lower-earning spouse maximizes expected value by waiting all the way until 70." - I agree in the case of a married couple, the higher earner should wait if the trailing spouse will claim spousal benefits (as opposed to just claiming their own). With 2 tries, you have a better chance to beat the average.

All of this, of course, assumes this income stream is competing with liquid assets that can be tapped without adding risk to the portfolio during the delay.
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