At what age will you take Social Security?

[retire@40]

Just curious to see when people plan on taking their SS benefits.

I know people have different age cut-offs for full benefits, but with all this talk about waiting to get higher benefits, I wonder how many people have decided not to take reduced benefits at 62.

 

[HFWR]

Current plan is 62, but that is subject to change based on the situation at the time; i.e. in ten years.

 

[Nords]

If the military had offered to give me a retirement lump sum instead of a COLA pension, I would've taken that too.

 

[REWahoo]

I'm not sure when. I have a little more than 2 years to go before I turn 62 and plan on taking a wait and see approach.

Until we started having the "wait until 70" discussions here over the past couple of years, I had planned to start at 62. Now that I know more about the growth of SS benefits by delaying beyond 62, understand more about how SS is taxed, and have given more thought to the impact of RMD's, I'm not sure when I'll start. My current thinking is to delay as long as my portfolio continues to hold up against my ~5% annual withdrawal. If When the market takes a downturn, no doubt I'll find out how convinced I am of the value of delaying...

 

[sgeeeee]

I'm 52 and my wife is 51 now. I'm tentatively planning on her (slightly lower benefit rate than me) starting benefits at age 62 and me at age 66 (full benefits) or later. If I don't live up to the mortality table predictions, she can choose to take my higher benefits instead of hers.

However, I don't have to decide yet and reserve the right to change my mind depending on how our investments and health hold between now and then.

 

[MJ]

As I mentioned in a previous thread, I am about 4 years away from collecting at 62 but I have always planned to take it between 66 and 70. My father is 95 1/2 and unless, I get some oddball disease, get hit by a little ol lady while riding my bike or get done in (for the money, of course) by my future 16 yo bride, I hope to live for another 35+ years. I like the idea of getting a cola'd monthly payment. "Ass"uming I trust that the goverment will honor its commitment, I would prefer to use up some of my nest egg to reduce my annual income which would lower my taxes when I began collecting my SS payments.

 

[Spanky]

I am have a long time to decide. As of now, plan to take it at 62.

 

[haha]

70 for me. I am not that confident about the current investment environment. I don't care about the possibility that I might die too early to get to breakeven- my investment decisions are made with what I can know prior to the decision. Even if it works out otherwise, if it was good decision up front, it remains a good decision no matter what happens.

Ha

 

[mathjak107]

After running the numbers many times with many different scenerios for us 62 is the choice. Although we could get a bigger monthly draw by waiting we probley wouldnt spend more as our expenses are already set.

The fact was on about a 2 million dollar portfolio to start the best calculation of waiting to 65 gave us about 50,000 bucks extra at the end of both our lives in the estate. Thats figuring all investments in the case of taking it early, and spending our investments in the early years before ss kicks in ,in the case of taking it later.

50,000 bucks in 30 + years will be worth what 5000.00 is today. Certainly not waiting for and playing the ill beat the system game by living longer.

We want to figure the ss money right from day 1 in our plans.

 

[dory36]

I think 62 makes more sense, despite what Scott Burns wrote -- see
http://early-retirement.org/forums/index.php?topic=9788.msg178067#msg178067

 

[OAG]

Been there done did that ---- 62 both DW and I. Never a question in our minds.

 

[Zipper]

I took early Canada Pension as soon as I was eligible at 60, which is a 30% discount from the normal age of 65.

We all get additional Old Age Security payments (based on years of residence in Canada) at age 65.

Both are indexed.

Both have to be applied for. It is not automatic.

 

[audreyh1]

I have no idea. I'll wait until I'm 61 to make that decision. I'm still pretty far away!!

Audrey

 

[Outtahere]

Before I found this forum I would have said 62. Dh took his but it will be the lower of the two and he insisted he take it at 62 dispite my warnings. He makes more than allowed and ignored that little part of it until he received his letter asking how he wanted to pay back the money he was over paid (insert curssing when the letter arrived).

I'm thinking I'll try to stick it out until 65, that way he can apply for the larger amount on his and I'll get my full benefit. But, like everything else in life, nothing is certain and I'll make the final decision when the time comes.

 

[REWahoo]

As I mentioned on the other SS thread, I’m still trying to understand the nuts & bolts of delaying SS to 66 or beyond. I attempted to run three looks at tax implications, with the following assumptions:

-Married filing jointly, standard deduction
-Both spouses the same age and begin SS at the same time
-Total income of $75,000 per year


SS @ 62 SS @ 66 SS @ 70
SS income 28,000 39,000 50,000
IRA w/drawal 47,000 36,000 25,000
Total 75,000 75,000 75,000

SS subject to tax 18,750 15,775 11,100
IRA subject to tax 47,000 36,000 25,000
Taxable income 65,750 51,775 36,100

Estimated tax 6,570 4,476 2,125
Percent 10.0% 8.7% 5.9%

This helps my understanding of the impact of delaying, but I do realize this is only part of the equation. It may not be rocket science but it sure isn't easy to grasp all the variables.

No wonder so many people say 'show me the money' at 62...

 

[Martha]

Before I found this forum I would have said 62. Dh took his but it will be the lower of the two and he insisted he take it at 62 dispite my warnings. He makes more than allowed and ignored that little part of it until he received his letter asking how he wanted to pay back the money he was over paid (insert curssing when the letter arrived).

I'm thinking I'll try to stick it out until 65, that way he can apply for the larger amount on his and I'll get my full benefit. But, like everything else in life, nothing is certain and I'll make the final decision when the time comes.

Outtahere, maybe your husband should look into withdrawing his SS application and repaying the benefits he received, and then take his benefits later. http://early-retirement.org/forums/index.php?topic=7344.0

Our course, you are going to have a messy tax situation.

 

[FinanceDude]

On another topic, since my sister was not married and had no kids, all of her payments into SS for the past 30 years are absorbed into the system............

I guess that's the rule, but it seems a waste................

 

[mickeyd]

This recent Burns column addresses this topic. It may pay to consider delaying it as long as you can.

http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2006/stories/DN-burns_01bus.ART.State.Edition1.317990e.html

 

[MooreBonds]

SS @ 62 SS @ 66 SS @ 70
SS income 28,000 39,000 50,000
IRA w/drawal 47,000 36,000 25,000
Total 75,000 75,000 75,000

SS subject to tax 18,750 15,775 11,100
IRA subject to tax 47,000 36,000 25,000
Taxable income 65,750 51,775 36,100

Estimated tax 6,570 4,476 2,125
Percent 10.0% 8.7% 5.9%

REW...one thing you may have overlooked - if you take SS early, or at age 66, does that result in a HIGHER IRA withdrawl @ age 70 1/2 for your RMDs, or will your IRA withdrawal be the same as when you start withdrawing @ 62/66?

One advanatage of waiting to take SS at 68 or 70 is that if you start withdrawing your IRA/401(k) at age 60/62/63, you have a lower balance at age 70 that you have to take your RMDs from...versus taking SS at age 62 with smaller IRA withdrawals, and then (possibly) beefing up your IRA withdrawals at age 70 1/2 due to RMDs and paying much higher taxes.

 

[MJ]

On another topic, since my sister was not married and had no kids, all of her payments into SS for the past 30 years are absorbed into the system............

I guess that's the rule, but it seems a waste................

It's no more wasteful than having auto, home, health, LTC (etc.) insurances and never having to make a claim. Of course, the difference is SS deductions are mandatory while various insurances for the most part are optional.

 

[REWahoo]

REW...one thing you may have overlooked - if you take SS early, or at age 66, does that result in a HIGHER IRA withdrawl @ age 70 1/2 for your RMDs, or will your IRA withdrawal be the same as when you start withdrawing @ 62/66?

One advanatage of waiting to take SS at 68 or 70 is that if you start withdrawing your IRA/401(k) at age 60/62/63, you have a lower balance at age 70 that you have to take your RMDs from...versus taking SS at age 62 with smaller IRA withdrawals, and then (possibly) beefing up your IRA withdrawals at age 70 1/2 due to RMDs and paying much higher taxes.

Peter, I’m in the process of trying to identify all the factors I need to consider in the when to take SS decision, and the RMD impact is a big one. Here is a list of the things I think need to be included in that decision:

- Tax implications of increased SS payments by delaying (my example in earlier post)
- RMD/tax impact of taking more from IRA’s prior to age 70 1/2
- Inflation impact
- Lost income from deferred SS payments
- Lost investment income from starting payments early and investing them (Dory’s example)
- Break even points for various start dates
- Value of improved survivor spouse benefit
- ?

What else needs to go into the equation? Has anyone put together a decision spreadsheet including these factors?

And how do you factor in the “I want my money now” syndrome I’ll probably come down with at age 62?

 

[johnbb]

I just turned 62 and need to decide. One huge factor for me is that I didn't start saving until my mid 40s, so my preference is to go back to work, even part-time and build my retirement account. If I don't find enough work, I'll need to decide whether to live on my $255 401K and take SS later, or mix SS with a lower distribution from my 401K. There is also the factor that I have a home with 400K equity, which I can't sell until 3-4 years from now, for personal reasons.

 

[New Thinking]

ReWahoo - I believe that the software we created is the only one in the country that does this all correctly. It gets very complicated as the information for all income needs to be precise. It is not available in a public domain and (as I posted a while back) we use to share the value of our "bridge" product.

You can send me a message if you are interested in seeing how this works.

 

[FIRE'd@51]

I did a calculation similar to Dory's and found that if you take SS at 62 instead of 66 and ignore the time value of money, the break-even age is 78. If you invest the money at a 5% real rate of return (after inflation), the break-even age moves out to 88.

 

[MasterBlaster]

I did a calculation similar to Dory's and found that if you take SS at 62 instead of 66 and ignore the time value of money, the break-even age is 78. If you invest the money at a 5% real rate of return (after inflation), the break-even age moves out to 88.

You obviously didn't include taxes.

Here's my take on delaying SS. The total amount of your SS income is approximately the same whether you atke it starting at 62, at full retirement age, or at 70. Dory pointed this out.

However, You can indeed increase your after tax income by delaying SS and spending down your nestegg in anticipation of extra SS income. This is because the tax laws are so regressive with respect to SS and other income.

The risk to a (delay to 70) strategy is that a future congress attempting to pay all the bills, will cap higher SS payments so that you lose the benefit of waiting all of those years to start your payment.

In other words, if we game the system including tax rules and SS rules, we will increase our spendable income.

However if the rules of the game change then all bets are off.