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Old 06-10-2012, 12:55 AM   #1
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I'll be 64 in a few months. My employer just declared bankruptcy, so I likely will be involuntarily "retired". I had been lurking and never did work up the courage to ER. I think I'll be able to stop working ( the prospect of landing another job is not all that good these days anyway, especially for someone my age) without too much worry about not having enough to see me through my "retirement" , because I can, and have lived very frugally, and I have no family. I am actually quite enjoying the free time, the freedom of having time to myself, and not having to answer to bosses and the demands of customers. So I understand now why you all would not trade your life and time for another dollar.

My question is about Social Security. I do not need to take it now, because I have enough rainy day money saved up that are sitting there earning nothing in a saving account. I look at my projected benefits at full retirement age vs the amount I'll get by taking them now, it appears that I will do better to wait. But will my benefit be stick at what I will be getting now and not increased because the estimated social security benefits calculator in SS site assumes that I'll be working and contributing to payroll taxes until the full retirement age?

Thanks. Here go.
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Old 06-10-2012, 09:22 AM   #2
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Welcome.

On the ss website there is a calculator that let's you play around with the retirement age vs the start collecting age.
Retirement Estimator

You have to enter some info about yourself including last years earnings... that generates the default estimate... then you can select create additional scenarios button. You can play around with the stop work age and use future earnings of $0
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Old 06-10-2012, 09:39 AM   #3
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Even without a family/spouse, you can "buy" the cheapest inflation adjusted annuity available by deferring SS. This would only make sense if you current health is excellent. Honestly, you will see very little discount between what you would get in SS "retiring" at 64 versus what they say you would get at 66. Also, make sure your taking SS (if you do) doesn't affect your ability to get unemployment. You might as well take the severance package your state offers.

Run your numbers through FIRECalc and see how well you do.
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Old 06-10-2012, 09:46 AM   #4
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Originally Posted by bondi688 View Post
My question is about Social Security. I do not need to take it now, because I have enough rainy day money saved up that are sitting there earning nothing in a saving account. I look at my projected benefits at full retirement age vs the amount I'll get by taking them now, it appears that I will do better to wait. But will my benefit be stick at what I will be getting now and not increased because the estimated social security benefits calculator in SS site assumes that I'll be working and contributing to payroll taxes until the full retirement age?

Sorry to hear about your "involuntary" retirement...but good to know that you have a decent stash set aside.

While it all depends on one's specific salary history, in general, because SS benefits are calculated based on your 30 highest earnings years, if it previously assumed you were working till age 65, and you suddenly have $0 for those last 2 years, it won't impact it too terribly much (unless you had very low incomes for your first 25 years and had a huge jump over the past 5 years).

Some of the ER members on the forum have been surprised to see that when they enter $0 for 10-15 years on their SS wage projections (from when they early retire at age 50 up until age 65), they find out that their SS benefit isn't impacted as much as they might have expected. Sure, there was some reduction, but it might surprise you that it might not be as drastic as you think.

If you are in good health and have a good family medical history, and your portfolio is healthy enough to spin out some income, many members on the forum would suggest you think about delaying SS to maximize your benefit and give a bit of insurance if you make it well into your later years, when the difference between full SS benefits and delaying-until-age-70 benefits will be magnified even more than they are now.
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Old 06-10-2012, 12:24 PM   #5
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Specifically, SS counts your best 35 years of income (right everyone?), with adjustments to early years for rising wage inflation. As stated before, most people find very little difference in benefits even when zeroing out the last few years.

However, benefits to rise significantly when you delay taking them. You can wait until you turn 70 to take SS and improve your benefits for each year you wait. Many of us will wait until 70.

So check the SS calculator, making sure to enter $0 for future income. The extra income is most likely not a consideration, but the delay in taking benefits will show a significant gain.
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Old 06-10-2012, 01:24 PM   #6
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However, benefits to rise significantly when you delay taking them. You can wait until you turn 70 to take SS and improve your benefits for each year you wait. Many of us will wait until 70.
I waited until 70, and thought it made sense. But a lot will depend on how the politics break.

Ha
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Old 06-10-2012, 01:50 PM   #7
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Thanks for all your inputs. This is a nice community to hang out.
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Old 06-11-2012, 01:59 AM   #8
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Welcome to the forum, bondi688.
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Old 06-11-2012, 07:16 AM   #9
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Specifically, SS counts your best 35 years of income (right everyone?)...
Right -- 35, not 30.
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