Claiming SS just a bit earlier than 70
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Claiming SS just a bit earlier than 70
Dear All;
Without doing a whole portfolio review, I have
Tax Deferred:
Rollover IRA
523K Vanguard TSM
190K Vanguard Total Bond
NY 403B
542K Guaranteed 7% Fund
NYC 457
50K Voya Total Stock Market
ROTH @Vanguard
77K Total Stock Market
Post Tax Brokerage @ VAnguard
24K VTI (Total Stock market ETF)
3K Norwegian Cruise
6K Costco
I have a 130K mortgage at 3.5% (24 years left)
NYC coop worth about 700K
0% Car loan 32K; 900 per month
I have a 58K non cola pension
DH has 24K per year SS
I am currently drawing 12K per year in Spousal SS.
I checked today and my future SS benefits are:
July 2022 3379/ MONTH
Jan 2023/ 3469/MONTH
July 2023 (MAXIMUM) 3578/MONTH
This year, even with no "leftover" income from the department of ed coming in, we are in the 22% bracket and would not exceed the 24% bracket if I took full benefits in January 2023.
I have been trying to delay claiming my own SS until 70, at least in part because it was recommended by the analysis gleaned from Mike Piper.
But looking down the road, it seems like it might be better to claim now, or in Jan 2023 and have the use of it now.
Tell me your thoughts. I am happy to be excoriated.
Without doing a whole portfolio review, I have
Tax Deferred:
Rollover IRA
523K Vanguard TSM
190K Vanguard Total Bond
NY 403B
542K Guaranteed 7% Fund
NYC 457
50K Voya Total Stock Market
ROTH @Vanguard
77K Total Stock Market
Post Tax Brokerage @ VAnguard
24K VTI (Total Stock market ETF)
3K Norwegian Cruise
6K Costco
I have a 130K mortgage at 3.5% (24 years left)
NYC coop worth about 700K
0% Car loan 32K; 900 per month
I have a 58K non cola pension
DH has 24K per year SS
I am currently drawing 12K per year in Spousal SS.
I checked today and my future SS benefits are:
July 2022 3379/ MONTH
Jan 2023/ 3469/MONTH
July 2023 (MAXIMUM) 3578/MONTH
This year, even with no "leftover" income from the department of ed coming in, we are in the 22% bracket and would not exceed the 24% bracket if I took full benefits in January 2023.
I have been trying to delay claiming my own SS until 70, at least in part because it was recommended by the analysis gleaned from Mike Piper.
But looking down the road, it seems like it might be better to claim now, or in Jan 2023 and have the use of it now.
Tell me your thoughts. I am happy to be excoriated.
Last edited by BarbBrooklyn on Fri Mar 04, 2022 12:30 pm, edited 1 time in total.
BarbBrooklyn |
"The enemy of a good plan is the dream of a perfect plan."
Re: Claiming SS just a bit earlier than 70
There have been people who have held out for the highest social security benefit at age 70 and have lost out because they passed away before they collected enough benefits to make up for the benefits they lost by waiting. The younger you are the more useful the income will be (and the longer it can grow by investing it if you choose to do so).
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Re: Claiming SS just a bit earlier than 70
+1. That's the part that seems to be missing from most of the "wait as long as you can" arguments.
I like to look at in terms of break-even points (same as when evaluating whether it's better to take a higher mortgage rate in exchange for a lender credit).BarbBrooklyn wrote: ↑Wed Mar 02, 2022 11:17 pm I checked today and my future SS benefits are:
July 2022 3379/ MONTH
Jan 2023/ 3469/MONTH
July 2023 (MAXIMUM) 3578/MONTH
- If you wait until Jan 2023, your monthly benefit will be $90 higher than if you claim in Jul 2022 [$3,469 - $3,379].
- But if you claim in Jul 2022, you will receive an additional 6 months of benefits before Jan 2023.
- That's a total of [6 x $3,379 = $20,274] before Jan 2023
- It would take almost 19 years for the higher-but-later monthly benefit to pass the total received from the earlier-but-lower monthly benefit
- $20,274/$90 = 225.27 months/12 = 18.8 years
Most advisors will tell you to wait, but in this scenario waiting puts you behind for 19 years. Which means I must be missing something.
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Re: Claiming SS just a bit earlier than 70
I'm a ways away from these decisions. (18 years for me, 14 for my wife). I DO think planning to wait until 70 for higher earner is usually best. But it also seems very much that as you get closer to 70, you've gotten more and more of the benefit of waiting, so if (and to me, ONLY IF) you really need the money earlier, it's fine to claim a few years earlier than 70, but if you DON'T need the money now, the higher monthly amount later (inflation adjusted) is worth waiting for.
Given the financials you mentioned, I could argue either way. but it seems it won't make a huge difference in your level of comfort either way, so do what feels best to you.
Given the financials you mentioned, I could argue either way. but it seems it won't make a huge difference in your level of comfort either way, so do what feels best to you.
Re: Claiming SS just a bit earlier than 70
Why not wait until 70? You are so close, and you still get the 12k spousal SS (which would go away once you start your own benefits). Plus you guys seem to have a lot of retirement accounts you can pull from if you need more money. That's what they are there for.
I don't think the "you could be dead tomorrow" thinking really applies.
Also, by waiting until the max, you are also setting your husband up for better payouts if he were to outlast you. It also will be helpful if he needs to take on the mortgage by himself to have more income coming in monthly.
You should also spend the last year converting what you can in the pretax retirement accounts to Roth, so you have less RMD
I don't think the "you could be dead tomorrow" thinking really applies.
Also, by waiting until the max, you are also setting your husband up for better payouts if he were to outlast you. It also will be helpful if he needs to take on the mortgage by himself to have more income coming in monthly.
You should also spend the last year converting what you can in the pretax retirement accounts to Roth, so you have less RMD
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Re: Claiming SS just a bit earlier than 70
I'm gonna suggest that Dink2Win is closer to the optimum...TropikThunder wrote: ↑Thu Mar 03, 2022 12:06 am+1. That's the part that seems to be missing from most of the "wait as long as you can" arguments.
I like to look at in terms of break-even points (same as when evaluating whether it's better to take a higher mortgage rate in exchange for a lender credit).BarbBrooklyn wrote: ↑Wed Mar 02, 2022 11:17 pm I checked today and my future SS benefits are:
July 2022 3379/ MONTH
Jan 2023/ 3469/MONTH
July 2023 (MAXIMUM) 3578/MONTHSimilarly, waiting until Jul 2023 gets you an additional $199/mo while you could have collected a full year at $3,379 in the meantime [$40,548]. That will take 203 months (17 years) to breakeven.
- If you wait until Jan 2023, your monthly benefit will be $90 higher than if you claim in Jul 2022 [$3,469 - $3,379].
- But if you claim in Jul 2022, you will receive an additional 6 months of benefits before Jan 2023.
- That's a total of [6 x $3,379 = $20,274] before Jan 2023
- It would take almost 19 years for the higher-but-later monthly benefit to pass the total received from the earlier-but-lower monthly benefit
- $20,274/$90 = 225.27 months/12 = 18.8 years
Most advisors will tell you to wait, but in this scenario waiting puts you behind for 19 years. Which means I must be missing something.
In choosing to start earlier, then the OP is forgoing the $1k/month in spousal SS {which, alas, some of us no longer qualify for due to "deemed filing"}....
This puts any "breakeven" much closer than 19 years, and remember that DRC's aren't applied for all credits immediately...only those already earned in the prior year (the rest get credited the following Jan, except when one turns 70 and all are applied immediately... see numerous threads on this) so the OP only gets what would be earned in the Jan number until the next Jan, when the DRC's finally get credited... so this should be accounted for in the breakeven
I wouldn't be claiming immediately, unless you really need the money, but the claim in Jan 2023 (as then the DRC's would be applying immediately) might not be far from the "optimum". Obviously, that does slightly limit the surviving spouse SS, once the "first to pass" is gone, but it's not looking that that would be too much of a problem for you as there's a bit of resources available.
Re: Claiming SS just a bit earlier than 70
TropikThunder has the right analysis.
The SS benefit increase is constant each month, but the amount it "costs you" to delay each month increases by that amount. SS is such a good deal (cheap COLA-protected longevity insurance that diversifies from your stock nest egg) that it is easy to argue for delaying to the absolute max. However, it is very reasonable to take a few months before 70, because those last few months are the most expensive relative to all the other delay time.
Personally, I delayed to 70 and am happy because of the italicized reasons above. I would not dream of excoriating someone for taking a few months before age 70, because in terms of the cost of delaying taking the SS benefit relative to the gain of delaying, those months are the most expensive of all.
The SS benefit increase is constant each month, but the amount it "costs you" to delay each month increases by that amount. SS is such a good deal (cheap COLA-protected longevity insurance that diversifies from your stock nest egg) that it is easy to argue for delaying to the absolute max. However, it is very reasonable to take a few months before 70, because those last few months are the most expensive relative to all the other delay time.
Personally, I delayed to 70 and am happy because of the italicized reasons above. I would not dream of excoriating someone for taking a few months before age 70, because in terms of the cost of delaying taking the SS benefit relative to the gain of delaying, those months are the most expensive of all.
Re: Claiming SS just a bit earlier than 70
Why the change of heart? Do you need it now for some reason? Why would it be better to claim now?BarbBrooklyn wrote: ↑Wed Mar 02, 2022 11:17 pm DH has 24K per year SS
I am currently drawing 12K per year in Spousal SS.
I checked today and my future SS benefits are:
July 2022 3379/ MONTH
Jan 2023/ 3469/MONTH
July 2023 (MAXIMUM) 3578/MONTH
This year, even with no "leftover" income from the department of ed coming in, we are in the 22% bracket and would not exceed the 24% bracket if I took full benefits in January 2023.
I have been trying to delay claiming my own SS until 70, at least in part because it was recommended by the analysis gleaned from Mike Piper.
But looking down the road, it seems like it might be better to claim now, or in Jan 2023 and have the use of it now.
Not sure why you would want to give up the extra monthly benefits for the rest of your life.
This isn't just my wallet. It's an organizer, a memory and an old friend.
Re: Claiming SS just a bit earlier than 70
And there are people who have taken their benefits early and lost out because they didn't pass away early.
This isn't just my wallet. It's an organizer, a memory and an old friend.
Re: Claiming SS just a bit earlier than 70
You've made it this far, may as well wait til 70. In saying that I do not know your health and current $ needs etc. After reviewing Open SSa few weeks ago, (it's a real eye opener btw) claiming now you'd probably still fall in the 90-95% optimal range which is pretty good in my book.
Re: Claiming SS just a bit earlier than 70
Based on OP's numbers it appears that there are only five months benefits to possibly received in 2022 prior to the quoted January 2023 number. Note the $90 increase from July to Jan vs the $109 for Jan to July. Also, you do need to subtract your forgone spousal benefits from any gain that you are otherwise trying to get when you determine how long it will to be recover. My situation is very close to yours with albeit a somewhat smaller spousal benefit and your post did cause me to look again at my spreadsheet. It is good to revisit and rethink these things as situations can change.
Re: Claiming SS just a bit earlier than 70
If it's a few months and you really need the income, then do it. But, let's not turn this into yet another "wait until 70?" thread. We've already got pleny of those - including one active five-pager:
viewtopic.php?f=10&t=370481&start=200
viewtopic.php?f=10&t=370481&start=200
Re: Claiming SS just a bit earlier than 70
You currently have $92k annual income in pension and SS. What are your expenses?
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Re: Claiming SS just a bit earlier than 70
So, in part, my thoughts about claiming sooner is in response to doing my taxes.
NYS allows me to withdraw (or convert) 20k from my retirement funds tax free. After that, those withdrawals are taxed as income at 5 something percent. In 2021, I converted about 40K and withdrew another 15K to fund travel.
Roth conversion is a given this year. But if I can avoid needing to withdraw any IRA money for living expenses, it would be a win. (Forgoing travel is not a risk I'm willing to take. DH has been dx'ed with MCI and we don't know if it's something thats going to progress to dementia.)
I think perhaps I should consider spending from my brokerage account this year if needed.
Thanks for all the insights, folks!
NYS allows me to withdraw (or convert) 20k from my retirement funds tax free. After that, those withdrawals are taxed as income at 5 something percent. In 2021, I converted about 40K and withdrew another 15K to fund travel.
Roth conversion is a given this year. But if I can avoid needing to withdraw any IRA money for living expenses, it would be a win. (Forgoing travel is not a risk I'm willing to take. DH has been dx'ed with MCI and we don't know if it's something thats going to progress to dementia.)
I think perhaps I should consider spending from my brokerage account this year if needed.
Thanks for all the insights, folks!
BarbBrooklyn |
"The enemy of a good plan is the dream of a perfect plan."
Re: Claiming SS just a bit earlier than 70
If you or your spouse died what would be the survivor's financial situation? Does the survivor get the full pension? What happens if inflation diminishes the value of the pension?
My choice was to wait for the maximum benefit, and I am glad I did. But I value the longevity insurance aspect of SS. Others seem to value what they can spend today.
My choice was to wait for the maximum benefit, and I am glad I did. But I value the longevity insurance aspect of SS. Others seem to value what they can spend today.
Re: Claiming SS just a bit earlier than 70
I think the taxable brokerage withdrawal makes sense so that you don't lose the spousal benefit. Whatever you sell VTI in your brokerage, in one of your retirement accounts you can sell some bonds and buy VTI to keep your market exposure the same, if you have concerns about selling in a down market.BarbBrooklyn wrote: ↑Thu Mar 03, 2022 7:00 am So, in part, my thoughts about claiming sooner is in response to doing my taxes.
NYS allows me to withdraw (or convert) 20k from my retirement funds tax free. After that, those withdrawals are taxed as income at 5 something percent. In 2021, I converted about 40K and withdrew another 15K to fund travel.
Roth conversion is a given this year. But if I can avoid needing to withdraw any IRA money for living expenses, it would be a win. (Forgoing travel is not a risk I'm willing to take. DH has been dx'ed with MCI and we don't know if it's something thats going to progress to dementia.)
I think perhaps I should consider spending from my brokerage account this year if needed.
Thanks for all the insights, folks!
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Re: Claiming SS just a bit earlier than 70
FWIW I'm going through my own SS questions right now as well. I watched an informative video by Rob Berger who ran the numbers based on several different scenarios as to taking SS. I was thinking FRA but now I'm not so sure.
https://www.youtube.com/watch?v=cJw5X2s_czg
https://www.youtube.com/watch?v=cJw5X2s_czg
Re: Claiming SS just a bit earlier than 70
I am not a Bogle master but some questions that answered would effect what I would do in your shoes
1. Are you married?
2. How old are you? Your spouse?
3. Would one of you benifit from taking the others higher survival benefits?
4. How healthy are you? Your spouse?
5. How old did your folks live? The spouses?
6. How much outgoing right now budget? What if one of you dies?
7. Do you have long term care insurance?
8. Any other dependants?
1. Are you married?
2. How old are you? Your spouse?
3. Would one of you benifit from taking the others higher survival benefits?
4. How healthy are you? Your spouse?
5. How old did your folks live? The spouses?
6. How much outgoing right now budget? What if one of you dies?
7. Do you have long term care insurance?
8. Any other dependants?
Re: Claiming SS just a bit earlier than 70
I'm for waiting to age 70. I think it is more about maximizing a couple's income, especially inflation protected income, to provide the most assurance of adequate retirement longevity funding. This assumes at least one of you is healthy and you can reasonably fund the wait without undue sacrifices.
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Re: Claiming SS just a bit earlier than 70
DH will get my full pension benefit and my SS survivor benefit. The mortgage will be paid off out of estate and he will be able to live here until he dies or moves. If I didn't drag him on trips, to the theater, out to eat, he would sit here at home and play one of his 7 guitars.CaptainT wrote: ↑Thu Mar 03, 2022 7:20 am I am not a Bogle master but some questions that answered would effect what I would do in your shoes
1. Are you married? Yes
2. How old are you? Your spouse? both69 this year
3. Would one of you benifit from taking the others higher survival benefits? if I predecease, he will get my higher benefit. He claimed at FRA and I took spousal--per Open SS
4. How healthy are you? Your spouse? I am very healthy. Spouse has MCI, pre-diabetes, high cholesterol
5. How old did your folks live? The spouses? me--dad 72, mom 94. Him--dad 40, mom 80
6. How much outgoing right now budget? What if one of you dies? Outgoing right now=120k-- NYC, travel, lots of dental work DH) this year and 2 very expensive feline deaths.
7. Do you have long term care insurance? no
8. Any other dependants? no
If HE dies, I get a "popped up" pension extra and get catapulted into the 35% tax bracket. And IRMAA territory--less worried about that, since NYC reimburses its retirees for Part B, including IRMAA.
I'm going to hold out til July '23. Thanks
BarbBrooklyn |
"The enemy of a good plan is the dream of a perfect plan."
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Re: Claiming SS just a bit earlier than 70
This is what I often refer to as the Bogleheads survivorship bias -- there aren't any dead people posting here wishing that they took SS earlier.123 wrote: ↑Wed Mar 02, 2022 11:48 pm There have been people who have held out for the highest social security benefit at age 70 and have lost out because they passed away before they collected enough benefits to make up for the benefits they lost by waiting. The younger you are the more useful the income will be (and the longer it can grow by investing it if you choose to do so).
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Re: Claiming SS just a bit earlier than 70
The inflation protected income is what was important to me. The annual COLA increase is based on your pension amount. Waiting means bigger increases. This is a problem for breakeven analysis, as breakeven for delaying comes much sooner during higher inflation. When I retired in 2000, my (non COLA) company pension covered almost all my expenses. Today it does not even cover my real estate taxes and I am living in the same house. I wanted my social security to cover cost of living increases.Dandy wrote: ↑Thu Mar 03, 2022 7:42 am I'm for waiting to age 70. I think it is more about maximizing a couple's income, especially inflation protected income, to provide the most assurance of adequate retirement longevity funding. This assumes at least one of you is healthy and you can reasonably fund the wait without undue sacrifices.
The COLA helps, but it is inadequate. The government plays games with COLA, particularly with housing costs, in order to keep their payments lower. They also substitute items in the basket (i.e., if butter goes up, substitute margarine under the assumption that "people will switch") This years COLA is 6%, but estimates of inflation that avoid substitution and consider housing and other costs minimized in the official figures can go as high as 15% for last year.
Another problem is that medical costs are increasing so fast that much of the SS increase is swallowed by Medicare premium increases. I have had a year when ALL of my wife's increase went to Medicare, and even then, the Medicare premium was limited to the social security increase so that my premium went up more than hers.
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Re: Claiming SS just a bit earlier than 70
Absolutely true - if there is a credible reason why the lifetime of you and/or your spouse will be shorter it makes sense to take it early.CoastLawyer2030 wrote: ↑Thu Mar 03, 2022 8:03 amThis is what I often refer to as the Bogleheads survivorship bias -- there aren't any dead people posting here wishing that they took SS earlier.123 wrote: ↑Wed Mar 02, 2022 11:48 pm There have been people who have held out for the highest social security benefit at age 70 and have lost out because they passed away before they collected enough benefits to make up for the benefits they lost by waiting. The younger you are the more useful the income will be (and the longer it can grow by investing it if you choose to do so).
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Re: Claiming SS just a bit earlier than 70
Yeah, we need to get all those upset dead people to post, which is kinds of the point. What do I care if I never drew SS if I am dead? I plan to draw SS when I need the money, but personally I am likely to delay until 70 so I can burn off or convert some tax deferred assets before I take my benefit. So I am in the take the benefit when you need them money camp.CoastLawyer2030 wrote: ↑Thu Mar 03, 2022 8:03 amThis is what I often refer to as the Bogleheads survivorship bias -- there aren't any dead people posting here wishing that they took SS earlier.123 wrote: ↑Wed Mar 02, 2022 11:48 pm There have been people who have held out for the highest social security benefit at age 70 and have lost out because they passed away before they collected enough benefits to make up for the benefits they lost by waiting. The younger you are the more useful the income will be (and the longer it can grow by investing it if you choose to do so).
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Re: Claiming SS just a bit earlier than 70
A valid point.This is what I often refer to as the Bogleheads survivorship bias -- there aren't any dead people posting here wishing that they took SS earlier.
If the wait is long and you don't have adequate resources to live a decent life that might tip the decision to take SS earlier than 70. But... we all know of retirees who are outliving their finances and are struggling. My parents had a pension and SS but had to move to Florida away from family and friends to barely exist.
The decision of when to take SS is not always easy. I think break even analysis is misleading. If you can reasonably enjoy life during the wait and you die early - you still had an enjoyable retirement. If you live to be 95 you might have really enjoyed the early retirement years but maybe the last decade or more might be very stressful. So to me as long as one of you is healthy and you can reasonably enjoy your life wait as long as you can.
It isn't as much as maximizing assets as it is trying to insure adequate retirement funding for as long a possible.
Re: Claiming SS just a bit earlier than 70
Barb:
One point: Go back to Mike Piper's http://opensocialsecurity.com and compare the difference. I suspect you will find that the lifetime difference between 69 and 70 is a four-digit number (a few thousand dollars). So you can do whichever makes you more comfortable, no need to go down the "optimum" rabbit hole.
One point: Go back to Mike Piper's http://opensocialsecurity.com and compare the difference. I suspect you will find that the lifetime difference between 69 and 70 is a four-digit number (a few thousand dollars). So you can do whichever makes you more comfortable, no need to go down the "optimum" rabbit hole.
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Re: Claiming SS just a bit earlier than 70
This is really only true for singles. For married, the high earner's benefit is the survivor's benefit. So dying does not end the high-earner's income stream.CoastLawyer2030 wrote: ↑Thu Mar 03, 2022 8:03 amThis is what I often refer to as the Bogleheads survivorship bias -- there aren't any dead people posting here wishing that they took SS earlier.123 wrote: ↑Wed Mar 02, 2022 11:48 pm There have been people who have held out for the highest social security benefit at age 70 and have lost out because they passed away before they collected enough benefits to make up for the benefits they lost by waiting. The younger you are the more useful the income will be (and the longer it can grow by investing it if you choose to do so).
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Re: Claiming SS just a bit earlier than 70
For singles, SS cannot be passed on to heirs.David Jay wrote: ↑Thu Mar 03, 2022 8:49 amThis is really only true for singles. For married, the high earner's benefit is the survivor's benefit. So dying does not end the high-earner's income stream.CoastLawyer2030 wrote: ↑Thu Mar 03, 2022 8:03 amThis is what I often refer to as the Bogleheads survivorship bias -- there aren't any dead people posting here wishing that they took SS earlier.123 wrote: ↑Wed Mar 02, 2022 11:48 pm There have been people who have held out for the highest social security benefit at age 70 and have lost out because they passed away before they collected enough benefits to make up for the benefits they lost by waiting. The younger you are the more useful the income will be (and the longer it can grow by investing it if you choose to do so).
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Re: Claiming SS just a bit earlier than 70
Virtually everyone understands that. But getting as much as one can from SS benefits before dying is probably not a good way to look at the issue of when to claim.TropikThunder wrote: ↑Thu Mar 03, 2022 12:06 am+1. That's the part that seems to be missing from most of the "wait as long as you can" arguments.
Which of the two situations is worse: you die before reaching your SS 'breakeven point', or you live to age 95, deplete your portfolio, and your SS benefits aren't adequate to meet your spending needs?
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Re: Claiming SS just a bit earlier than 70
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Last edited by Lookingforanswers on Sun Mar 06, 2022 3:32 pm, edited 1 time in total.
Re: Claiming SS just a bit earlier than 70
That's true! There aren't any dead people posting here wishing they took SS later, either.CoastLawyer2030 wrote: ↑Thu Mar 03, 2022 8:03 amThis is what I often refer to as the Bogleheads survivorship bias -- there aren't any dead people posting here wishing that they took SS earlier.123 wrote: ↑Wed Mar 02, 2022 11:48 pm There have been people who have held out for the highest social security benefit at age 70 and have lost out because they passed away before they collected enough benefits to make up for the benefits they lost by waiting. The younger you are the more useful the income will be (and the longer it can grow by investing it if you choose to do so).
Dead people can be so selfish sometimes...
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Re: Claiming SS just a bit earlier than 70
For a married couple, usually the best decision is for the higher earner to delay taking SS. My COLA this year was up 4.6 % after taking out for SS payments and IRMAA. Since I invest my SS payment a low COLA is fine with me. We have other income we for our expenses.
The reasons I, as the higher earner, delayed SS was to do Roth conversions, and longevity insurance for DW who is healthy and has extreme longevity in her family. I filed and suspended under the old rules and DW took a spousal benefit. The spousal benefit was not a lot lower than her age 70 benefit. So, we delayed her claiming of her own benefit to 70.
The reasons I, as the higher earner, delayed SS was to do Roth conversions, and longevity insurance for DW who is healthy and has extreme longevity in her family. I filed and suspended under the old rules and DW took a spousal benefit. The spousal benefit was not a lot lower than her age 70 benefit. So, we delayed her claiming of her own benefit to 70.
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Re: Claiming SS just a bit earlier than 70
We are much more likely to have living people post here because they are older than they ever imagined. Growing old carries a higher financial risk than dying young and “losing out” on a SS benefit you won’t need after you expire.TheTimeLord wrote: ↑Thu Mar 03, 2022 8:18 amYeah, we need to get all those upset dead people to post, which is kinds of the point. What do I care if I never drew SS if I am dead? I plan to draw SS when I need the money, but personally I am likely to delay until 70 so I can burn off or convert some tax deferred assets before I take my benefit. So I am in the take the benefit when you need them money camp.CoastLawyer2030 wrote: ↑Thu Mar 03, 2022 8:03 amThis is what I often refer to as the Bogleheads survivorship bias -- there aren't any dead people posting here wishing that they took SS earlier.123 wrote: ↑Wed Mar 02, 2022 11:48 pm There have been people who have held out for the highest social security benefit at age 70 and have lost out because they passed away before they collected enough benefits to make up for the benefits they lost by waiting. The younger you are the more useful the income will be (and the longer it can grow by investing it if you choose to do so).
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Re: Claiming SS just a bit earlier than 70
DesertDiva wrote: ↑Thu Mar 03, 2022 5:13 pmWe are much more likely to have living people post here because they are older than they ever imagined. Growing old carries a higher financial risk than dying young and “losing out” on a SS benefit you won’t need after you expire.TheTimeLord wrote: ↑Thu Mar 03, 2022 8:18 amYeah, we need to get all those upset dead people to post, which is kinds of the point. What do I care if I never drew SS if I am dead? I plan to draw SS when I need the money, but personally I am likely to delay until 70 so I can burn off or convert some tax deferred assets before I take my benefit. So I am in the take the benefit when you need them money camp.CoastLawyer2030 wrote: ↑Thu Mar 03, 2022 8:03 amThis is what I often refer to as the Bogleheads survivorship bias -- there aren't any dead people posting here wishing that they took SS earlier.123 wrote: ↑Wed Mar 02, 2022 11:48 pm There have been people who have held out for the highest social security benefit at age 70 and have lost out because they passed away before they collected enough benefits to make up for the benefits they lost by waiting. The younger you are the more useful the income will be (and the longer it can grow by investing it if you choose to do so).
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Re: Claiming SS just a bit earlier than 70
I have missed your point.Nyc10036 wrote: ↑Thu Mar 03, 2022 9:58 amFor singles, SS cannot be passed on to heirs.David Jay wrote: ↑Thu Mar 03, 2022 8:49 amThis is really only true for singles. For married, the high earner's benefit is the survivor's benefit. So dying does not end the high-earner's income stream.CoastLawyer2030 wrote: ↑Thu Mar 03, 2022 8:03 amThis is what I often refer to as the Bogleheads survivorship bias -- there aren't any dead people posting here wishing that they took SS earlier.123 wrote: ↑Wed Mar 02, 2022 11:48 pm There have been people who have held out for the highest social security benefit at age 70 and have lost out because they passed away before they collected enough benefits to make up for the benefits they lost by waiting. The younger you are the more useful the income will be (and the longer it can grow by investing it if you choose to do so).
My point was that - for singles - SS payback is based on first-to-die (only to die). The same is true for the lower earning spouse of a married couple. But for the higher earning spouse the SS payback is based on second-to-die. This radically alters the payback calculation.
Last edited by David Jay on Thu Mar 03, 2022 6:23 pm, edited 1 time in total.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Re: Claiming SS just a bit earlier than 70
OP,
I sort of went through the opposite decision-making process. My birthday is in September. I had planned to claim SS in January of the year I would turn 70. Figured I would start the tax year with my "new" income. Simple. Neat.
But as the time approached and I was doing just fine with my cash and spending, I changed my mind and opted to hold out for the max.
My advice would be don't overthink it. It's not all about the math. Do what seems right for you -- then live with your decision.
I sort of went through the opposite decision-making process. My birthday is in September. I had planned to claim SS in January of the year I would turn 70. Figured I would start the tax year with my "new" income. Simple. Neat.
But as the time approached and I was doing just fine with my cash and spending, I changed my mind and opted to hold out for the max.
My advice would be don't overthink it. It's not all about the math. Do what seems right for you -- then live with your decision.
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Re: Claiming SS just a bit earlier than 70
Gerry, thanks for that input.GerryL wrote: ↑Thu Mar 03, 2022 6:05 pm OP,
I sort of went through the opposite decision-making process. My birthday is in September. I had planned to claim SS in January of the year I would turn 70. Figured I would start the tax year with my "new" income. Simple. Neat.
But as the time approached and I was doing just fine with my cash and spending, I changed my mind and opted to hold out for the max.
My advice would be don't overthink it. It's not all about the math. Do what seems right for you -- then live with your decision.
Right now, my plan is to wait until at least January 2023, evaluate DH's husband's health, our travel plans (big 10K cruise in Sept 2022 which I will cash flow) and whatever life throws at us.
I am pretty sure that I will delay until July 2023.
BarbBrooklyn |
"The enemy of a good plan is the dream of a perfect plan."
Re: Claiming SS just a bit earlier than 70
My point is that SS is not something that can be willed to an heir.David Jay wrote: ↑Thu Mar 03, 2022 5:59 pmI have missed your point.Nyc10036 wrote: ↑Thu Mar 03, 2022 9:58 amFor singles, SS cannot be passed on to heirs.David Jay wrote: ↑Thu Mar 03, 2022 8:49 amThis is really only true for singles. For married, the high earner's benefit is the survivor's benefit. So dying does not end the high-earner's income stream.CoastLawyer2030 wrote: ↑Thu Mar 03, 2022 8:03 amThis is what I often refer to as the Bogleheads survivorship bias -- there aren't any dead people posting here wishing that they took SS earlier.123 wrote: ↑Wed Mar 02, 2022 11:48 pm There have been people who have held out for the highest social security benefit at age 70 and have lost out because they passed away before they collected enough benefits to make up for the benefits they lost by waiting. The younger you are the more useful the income will be (and the longer it can grow by investing it if you choose to do so).
My point was that - for singles - SS payback is based on first-to-die (only to die). The same is true for the lower earning spouse of a married couple. But for the higher earning spouse the SS payback is based on second-to-die. This radically alters the payback calculation.
So, if I take SS early, that money I get can be saved and passed on.
If I die before I start taking SS, there is no money to pass on in my will.
Re: Claiming SS just a bit earlier than 70
How did they lose out? They are dead. There is nothing to lose when you are dead.
Re: Claiming SS just a bit earlier than 70
Okay. The comments I quoted seem to be in agreement with you.Nyc10036 wrote: ↑Thu Mar 03, 2022 9:45 pmMy point is that SS is not something that can be willed to an heir.David Jay wrote: ↑Thu Mar 03, 2022 5:59 pmI have missed your point.Nyc10036 wrote: ↑Thu Mar 03, 2022 9:58 amFor singles, SS cannot be passed on to heirs.David Jay wrote: ↑Thu Mar 03, 2022 8:49 amThis is really only true for singles. For married, the high earner's benefit is the survivor's benefit. So dying does not end the high-earner's income stream.CoastLawyer2030 wrote: ↑Thu Mar 03, 2022 8:03 am
This is what I often refer to as the Bogleheads survivorship bias -- there aren't any dead people posting here wishing that they took SS earlier.
My point was that - for singles - SS payback is based on first-to-die (only to die). The same is true for the lower earning spouse of a married couple. But for the higher earning spouse the SS payback is based on second-to-die. This radically alters the payback calculation.
So, if I take SS early, that money I get can be saved and passed on.
If I die before I start taking SS, there is no money to pass on in my will.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Re: Claiming SS just a bit earlier than 70
And if you die early, all that will be true.
Of course if your don't die early, you will pass on less to your heirs.
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Re: Claiming SS just a bit earlier than 70
This reminds me of the pension consult I had when retiring. The person I spoke to advised taking SS as early as possible and investing it aggressively for the sake of heirs.
I am missing the gene that makes me care about my heirs. I think the best I can do for them is maximizing the amount of money I have to care for myself.
BarbBrooklyn |
"The enemy of a good plan is the dream of a perfect plan."
Re: Claiming SS just a bit earlier than 70
Someone started a terrific thread here that demonstrates how you can have more money to care for yourself by delaying your SS benefits. Pretty much exactly the opposite of what your consult advised.BarbBrooklyn wrote: ↑Fri Mar 04, 2022 6:36 am This reminds me of the pension consult I had when retiring. The person I spoke to advised taking SS as early as possible and investing it aggressively for the sake of heirs.
I am missing the gene that makes me care about my heirs. I think the best I can do for them is maximizing the amount of money I have to care for myself.
This isn't just my wallet. It's an organizer, a memory and an old friend.
Re: Claiming SS just a bit earlier than 70
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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Re: Claiming SS just a bit earlier than 70
I know, I was reading that this morning. Makes a good case.JoeRetire wrote: ↑Fri Mar 04, 2022 7:31 amSomeone started a terrific thread here that demonstrates how you can have more money to care for yourself by delaying your SS benefits. Pretty much exactly the opposite of what your consult advised.BarbBrooklyn wrote: ↑Fri Mar 04, 2022 6:36 am This reminds me of the pension consult I had when retiring. The person I spoke to advised taking SS as early as possible and investing it aggressively for the sake of heirs.
I am missing the gene that makes me care about my heirs. I think the best I can do for them is maximizing the amount of money I have to care for myself.
What has surprised me is the number of my acquaintances who, when asked, have NOT waited until 70, or I some cases even FRA. Smart people, but with a different lens, I guess.
BarbBrooklyn |
"The enemy of a good plan is the dream of a perfect plan."
Re: Claiming SS just a bit earlier than 70
"Different lens" is correct. I have been saying this for about 4 years:BarbBrooklyn wrote: ↑Fri Mar 04, 2022 10:17 amWhat has surprised me is the number of my acquaintances who, when asked, have NOT waited until 70, or I some cases even FRA. Smart people, but with a different lens, I guess.
This topic always spirals down into a debate between two camps who are operating from two different viewpoints. It is not really about the math, it is about how you view the program:
View A (I call this the “ROI” view): I have been paying into SS my entire working life and I want to make every effort to recoup those funds. Since the date of my demise is unknown, the sooner I file the more likely it is that I can get most of my money back if I pass at a young age.
View B (I call this the “annuity” view): The date of my (“our”, if married) demise is unknown, I (one of us) may live to be 100. I want to assure the maximum income stream into my (our) golden years.
Again, neither view is “right”, but where you start determines where you end up. At BH, we need to give the other side the right to hold their view without beating each other up.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Re: Claiming SS just a bit earlier than 70
I am not anticipating a longevity gene of living to 100.BarbBrooklyn wrote: ↑Fri Mar 04, 2022 6:36 am I am missing the gene that makes me care about my heirs. I think the best I can do for them is maximizing the amount of money I have to care for myself.
I don't have any history of my father's side other than my father.
He was adopted.
On my mother's side, longevity to 100 doesn't run there either.
When I write "heirs", I mean those entities that I want to get my money when I pass.
I am in the view A camp in David Jay's post just abvove this post.
It's my money, and I want to recoup as much as I can to do with as I please.
Re: Claiming SS just a bit earlier than 70
BarbBrooklyn wrote: ↑Fri Mar 04, 2022 10:17 amI know, I was reading that this morning. Makes a good case.JoeRetire wrote: ↑Fri Mar 04, 2022 7:31 amSomeone started a terrific thread here that demonstrates how you can have more money to care for yourself by delaying your SS benefits. Pretty much exactly the opposite of what your consult advised.BarbBrooklyn wrote: ↑Fri Mar 04, 2022 6:36 am This reminds me of the pension consult I had when retiring. The person I spoke to advised taking SS as early as possible and investing it aggressively for the sake of heirs.
I am missing the gene that makes me care about my heirs. I think the best I can do for them is maximizing the amount of money I have to care for myself.
What has surprised me is the number of my acquaintances who, when asked, have NOT waited until 70, or I some cases even FRA. Smart people, but with a different lens, I guess.
"What has surprised me is the number of my acquaintances who, when asked, have NOT waited until 70, or I some cases even FRA. Smart people, but with a different lens, I guess."
The question is what lens did they use?
Did they model their own most likely future scenario(s) and calculate the after tax dollars (spendable) of their overall plan to see what their best plan is?
Our lens includes utilizing the RPM calculator as well as Pralana gold as well as making the most likely adjustments for our heirs tax rates.
What lens did they use?
Re: Claiming SS just a bit earlier than 70
I am curious to know, since the door was opened with these acquaintances, if any were asked whether or not they regretted their decision. In my sphere I have yet to find any that did, and this from both early and late takers. Does this mean maybe it really doesn't matter that much?BarbBrooklyn wrote: ↑Fri Mar 04, 2022 10:17 amI know, I was reading that this morning. Makes a good case.JoeRetire wrote: ↑Fri Mar 04, 2022 7:31 amSomeone started a terrific thread here that demonstrates how you can have more money to care for yourself by delaying your SS benefits. Pretty much exactly the opposite of what your consult advised.BarbBrooklyn wrote: ↑Fri Mar 04, 2022 6:36 am This reminds me of the pension consult I had when retiring. The person I spoke to advised taking SS as early as possible and investing it aggressively for the sake of heirs.
I am missing the gene that makes me care about my heirs. I think the best I can do for them is maximizing the amount of money I have to care for myself.
What has surprised me is the number of my acquaintances who, when asked, have NOT waited until 70, or I some cases even FRA. Smart people, but with a different lens, I guess.
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Re: Claiming SS just a bit earlier than 70
With so much in tax deferred, I would wait as long as possible so as to maximize Roth conversions.