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Old 07-06-2016, 04:39 PM   #61
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That article confuses me. It says the study surveyed 1000 people age 50 and older. That means at least some of the people aren't of age to take SS yet. Certainly people who aren't even eligible for SS aren't going to regret a decision they haven't had to commit to or act upon, right? And don't tell me that they didn't include those in the numbers, because they say 77% of those retired 10 years or more would not change and 69% of those recently retired would not change, so it would take a larger number of the pre-retireds not regretting that future decision to bring that number back to 23% regretting their decision.


Odd that the people retired longer, and thus closer to the break even point, seem less regretful of the decision to take SS early.
Bingo! Ask a bunch of 80 year olds and they'd probably say they regret it. But they can't remember the fun that extra money early on hopefully brought them.
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Old 07-06-2016, 05:22 PM   #62
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I bet 100% of those who took social security between the ages of 50 and 60 regret not waiting as they would be taking it on Social Security disability as well as many who took between 60 and 62. It'll be interesting to find out how many of those were on disability versus widow's benefits. But I think even a lot of those on widow's benefits would prefer to have their spouse
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25% of SS recipients sorry they took payments early...
Old 07-06-2016, 05:31 PM   #63
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25% of SS recipients sorry they took payments early...

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Originally Posted by Tadpole View Post
I have been running some projections and it has become more difficult to handle SS COLA since, for all I know, all future COLAs will just transfer funds from the SS Trust Fund to cover increases in Medicare. If so, many people will find that, for planning purposes, SS is not COLAed. Has this occurred to anyone else?


I ran some projections too. Thanks to WEP I will draw about $100 if I take at 62. If I wait until 66 it jumps to near $150. Decisions , decisions and only 10 years left to come up with the correct decision. I hope I don't screw this one up.
At least medicare will come out of your check. Heck, they will not only take that money, but I will have to write them a check each month to pay the medicare balance. Poor me....Hope I don't go senile and forgot to cut the check and lose my medicare.


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Old 07-06-2016, 05:37 PM   #64
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That ignores the point Cut-Throat has made time and time again.

You can spend more now, with the knowledge that you will be getting more in the future.

-ERD50
When I ran FIRECalc using my actual stash size and actual SS benefits (not discounting for likely SS reduction in the future), it does not make much difference between me taking at 62 or 70.

If I take it at 62, I will be drawing less from my savings. My savings will support a longer period, due to the lower WR.

If I take it at 70, I will draw down my savings more until 70. And when SS finally kicks in, it will be higher to make up for my savings withdrawal, which will get cut back at that point due to its smaller balance.

The budgets that the two cases support are within 1% of each other, so well within variations of changes in future market returns, tax law changes, benefit cuts due to SS short fall, etc...

If the amount I can spend is the same, why not take it early if the market tanks, or if I fear they may change some laws?

I still have that option to choose. Other people may not.
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Old 07-07-2016, 05:39 AM   #65
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Studies that look at investment advice, and decisions to be made, can really be skewed by using history... even long term history. While the law of averages suggests that safety lies in "going with the odds"... as in FIRECAC... even this has to be considered in the light of possible major changes.

SS, especially is affected by historical norms. In 1998, when we began taking SS at age 62, we were still receiving 11% interest on some 5 year laddered CD's. As we were financing our retirement from savings, it was a no-brainer to take the Social Security to supplement what we were taking from our savings, and to continue to earn higher interest on investments.

While it appears that very few ER members consider the possibility of hyper inflation in the future, still, it is a possibility, given the national macroeconomics and the expanding national debt. Future increases in SS due to waiting could be obviated by rapid inflation, as increased entitlements rarely rise during these times.

So, yes... this is "old" thinking, and counter to presently accepted financial advice. Probably influenced by living in the aftermath of hard times in the 1930's.
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Old 07-07-2016, 06:28 AM   #66
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While it appears that very few ER members consider the possibility of hyper inflation in the future
Maybe only those who don't remember the 70s and 80s, which are a very vivid memory for the rest of us.
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Old 07-07-2016, 07:19 AM   #67
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If the amount I can spend is the same, why not take it early if the market tanks, or if I fear they may change some laws?
Sure. I will do the same in those cases. Absent those cases, I will delay so that if I live beyond the average, I'll get the higher benefit. Living short of the average is not a consideration, because I'm not going to spend even more to take "advantage" of this unless I have a terminal illness and know for sure I won't need the money later.

The point being made by ERD is that SS+pension+IRAs+taxable is, for the most part, one big pile of money to spend from. Just because you are deferring SS until later doesn't mean you can't spend from other sources in the meantime. Yet again and again people are saying they want to take SS early so they can spend more in their 60s while they are healthier. As long as you have enough other money you can spend from other sources.

There are some very valid reasons to take SS early. Being able to spend more early is not really one of them for most of us here.
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Old 07-07-2016, 07:25 AM   #68
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As far as inflation goes, that seems like an easy one to address. If it ramps up, I agree that locking up some high CD rates and taking SS at that point might be the right move. But I'm not seeing any reason to take SS early on the chance that SS might jump in the future. The choices aren't "take it at 62 or wait until 70"; I can start any month in between them as well.
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Old 07-07-2016, 07:40 AM   #69
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When I ran FIRECalc using my actual stash size and actual SS benefits (not discounting for likely SS reduction in the future), it does not make much difference between me taking at 62 or 70.

If the amount I can spend is the same, why not take it early if the market tanks, or if I fear they may change some laws?
Same here. In fact, I ran some numbers for my brother last week and he's slightly better taking it as early as possible vs FRA or 70.

Our fellow poster "mathjak" always harps on us about how dividends are a 'net zero' gain because the price of the equity drops in line with the dividend.

To me, if SS breaks even at age 79 or so--slightly more when you factor in taxes and withdrawn investment avoidance, the age discussion does become moot.

As NW notes, we might be trading off longevity against the drumbeat of real possibility of changes to SS's benefits; "take the money and run".
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Old 07-07-2016, 07:45 AM   #70
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One reason many people l know take SS early is the belief that SS may be cut-off or severely cut back in the not so distant future. They seem to think they will be grandfathered in to their current SS payment since they are already getting a SS check. No cuts for them! At the same time those who waited for SS full retirement age or beyond will be told to 'take a hike' as there is no money left over. IMHO, they are sadly mistaken.
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Old 07-07-2016, 07:49 AM   #71
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I plan on taking SS at 62 (according to the principle "you've got what you've got" - too many uncertainties about solvency of SS, life expectancy, etc). Alas, if I live past the break-even date, then I will probably regret that decision..... c'est la vie
there should be no hindsight on irrevocable decisions
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Old 07-07-2016, 08:02 AM   #72
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One reason many people l know take SS early is the belief that SS may be cut-off or severely cut back in the not so distant future. They seem to think they will be grandfathered in to their current SS payment since they are already getting a SS check. No cuts for them! At the same time those who waited for SS full retirement age or beyond will be told to 'take a hike' as there is no money left over. IMHO, they are sadly mistaken.
I agree that it is likely everyone takes a haircut when things come to a head with SS insolvency. That said, whatever happens at that point, if I have been collecting since age 62, then I have already cashed those checks and they are secure. Everything else is unknown
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Old 07-07-2016, 08:05 AM   #73
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there should be no hindsight on irrevocable decisions
I do agree with that completely - as you say, no real point in worrying if you can't do anything about it anyway
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Old 07-07-2016, 08:08 AM   #74
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One reason many people l know take SS early is the belief that SS may be cut-off or severely cut back in the not so distant future. They seem to think they will be grandfathered in to their current SS payment since they are already getting a SS check. No cuts for them! At the same time those who waited for SS full retirement age or beyond will be told to 'take a hike' as there is no money left over. IMHO, they are sadly mistaken.
Yes, but:
1) The money I've already received is spent and/or has mitigated my withdrawals until that time and,

2) There is a slight chance that grandfathering would be in place. If not, see #1.

Every day that goes by without a haircut is money in the bank. Waiting doesn't provide that option.

If timing SS is neutral (until age 79) AND there are cuts coming (actual or tax), all the more reason to take it now. As I said "take the money and run"
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Old 07-07-2016, 08:20 AM   #75
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Alas, if I live past the break-even date, then I will probably regret that decision..... c'est la vie
If I live past the break-even date--in the words of the great wit Mike Tyson "I won't know whether to be ecstatic or ludicrous".

I'll be so happy to hit 80, "losing" a little money on a decision I made 18 years earlier won't even enter my mind.
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Old 07-07-2016, 08:30 AM   #76
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DW and I have decided to take it at 65 so as to coincide with medicare start. Not that we need the money but since ACA will be out of the picture then might as well take the slightly less payout for the maximum number of years. Have run my spreadsheets using a combination of different SS draw dates from 64 to 70. The results at age 95 longevity are relatively miniscule compared to total asset value at the end. In any event none of my projections leave wife out of money even were I to die at any age from 65 on up so all is good.
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Old 07-07-2016, 09:23 AM   #77
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AIME...
in 1998, at age 62 the maximum contribution to social security for purposes of SS monthly payout was based on $48K annual income. Today, the amount is $113K.

A look at the chart on this page, will indicate how, and when this amount has grown.

https://www.ssa.gov/oact/cola/examplemax.html

Historical numbers for monthly income at ages 62, 65 and 70 are shown here... based on today.
Attached Images
File Type: jpg SS chart.jpg (120.4 KB, 51 views)
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Old 07-07-2016, 12:22 PM   #78
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One reason many people l know take SS early is the belief that SS may be cut-off or severely cut back in the not so distant future. They seem to think they will be grandfathered in to their current SS payment since they are already getting a SS check. No cuts for them! At the same time those who waited for SS full retirement age or beyond will be told to 'take a hike' as there is no money left over. IMHO, they are sadly mistaken.
I would not be naive to count on the grandfathering. But the money that you already got and spent, they are not going to make you disgorge it.

Some clauses did get grandfathered in, such as the spousal benefits that they just took away recently.
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Old 07-07-2016, 02:02 PM   #79
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I use a 21% SS cut starting in 2034 for my spreadsheet calcs, FIP, Firecalc and I-orp runs, if it doesn't happen then all the better!
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Old 07-07-2016, 02:04 PM   #80
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I have been running some projections and it has become more difficult to handle SS COLA since, for all I know, all future COLAs will just transfer funds from the SS Trust Fund to cover increases in Medicare. If so, many people will find that, for planning purposes, SS is not COLAed. Has this occurred to anyone else?
No, that would never occur to any of us bumpkins.
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