Break-even SS 62 vs 66 vs 70 calculators ?

[Chuckanut]

Well yes and no.
One can need SS to retire as part of the overall WR calculation, but just doesn't need it at the point of early retirement. This is my scenario.

Good point. Depending on one's plans SS will be needed later on to fill in some of income gaps later in life. Perhaps we should ask if a person immediately needs SS to retire.

 

[pb4uski]

Such a poll was run last summer:

http://www.early-retirement.org/forums/f28/poll-is-ss-a-critical-part-of-your-retirement-plan-87122.html

Summary: 45% said they didn't need or care about SS. About 14% depend entirely on SS to retire. The other 41% depend on SS to some ambiguous degree.

When my wife and I tried to determine when to retire, we assumed SS would be available. We would have needed to work too much longer otherwise.

But what you said before was:

"Since most everyone here does not NEED SS to live without a paycheck,"

The poll says we've got 14+41% or 55% (over half) who said they NEED it to at least some degree. That's why people bristled when you said most everyone doesn't need it. It simply wasn't correct. Not even close.

And you're totally guessing on the City-Data numbers so that's pretty meaningless. But yes, I'd expect e-r.org numbers to be better in that regard.

WADR RB, I think you are picking nits. I suspect that if the poll had been constructed as need or don't need with no middle ground, that at least 6% of that 41% in the middle would have flopped over into the don't need category... confiriming the suggestion that most everyone here does not need SS..... that would only be 15% of the middle category deciding don't need if they were only given two choices.

You were then one that was not even close by presuming that all in that middle category would flip into the need category if they were only give two choices.

 

[RunningBum]

WADR RB, I think you are picking nits. I suspect that if the poll had been constructed as need or don't need with no middle ground, that at least 6% of that 41% in the middle would have flopped over into the don't need category... confiriming the suggestion that most everyone here does not need SS..... that would only be 15% of the middle category deciding don't need if they were only given two choices.

You were then one that was not even close by presuming that all in that middle category would flip into the need category if they were only give two choices.

I don't consider "most everyone" to be a simple majority. I would consider "most everyone" to probably be in the 90+% range, at least 80+%. But, whatever. I'm no statistician but I'm guessing the margin of errors in our polls is very high. And it doesn't matter to me what others are doing or have, though I will listen to see if there's anything I can learn and apply to my situation.

 

[Cessna152]

I don't consider "most everyone" to be a simple majority. I would consider "most everyone" to probably be in the 90+% range, at least 80+%. But, whatever. I'm no statistician but I'm guessing the margin of errors in our polls is very high. And it doesn't matter to me what others are doing or have, though I will listen to see if there's anything I can learn and apply to my situation.

If that poll were a random sampling, the number of responses it got would yield answers with error ranges small enough for most people’s purposes.

But it wasn’t a random sampling - so self-selection bias is a possibility (IMHO a near certainty.) Specific examples: In this forum it appears to me that relying on SS appears to be looked down upon. So those who rely on SS may be hesitant to admit to it even in an anonymous poll - assuming they stick around long enough to see such polls. And those who have no need for SS would be justifiably proud to announce their well-earned success in such a poll.

 

[Cut-Throat]

If that poll were a random sampling, the number of responses it got would yield answers with error ranges small enough for most people’s purposes.

But it wasn’t a random sampling - so self-selection bias is a possibility (IMHO a near certainty.) Specific examples: In this forum it appears to me that relying on SS appears to be looked down upon. So those who rely on SS may be hesitant to admit to it even in an anonymous poll - assuming they stick around long enough to see such polls. And those who have no need for SS would be justifiably proud to announce their well-earned success in such a poll.

You got that right! .... A lot of folks here talk about S.S. as if it were change that fell out of the couch cushions.....


In my own case when my wife and Start taking S.S. in about 3 years it will be about $60K/year with a cola. So at a 4% SWR this is around $1.5 Million Additional Nest Egg. I have not had $1.5 Mil fall out of my Couch Lately.

 

[Major Tom]

Is that a true statement?

Is this site restricted to the mega rich with a minimum of a 6 figure income and savings in the millions?

Nope, not at all. I ER'ed on quite a bit less than $1M about 7 years ago, and am not relying on future SS though, of course, the extra income will be welcome. This site has proved very instructive and useful.

 

[Perryinva]

Exactly, points and nits well taken. Just pointing out that a guesstimate of general positions based on reading a lot of posted positions here, bears out that while no one doesn’t want money they are entitled to, the handling of said money is certainly different and more decisively based on what matters, not the silly break even argument.

I’ve run FIRECALC for my situation both ways. Using $1M as a portfolio amount 60/40, with two non COLA pensions with SS starting at 25k at age 62, and again with an $850k portfolio but SS of $35k at 62. Basically using $150 k to fund an equal SS of $37k at 67, back calculated to $35 k at 62. Not even close. Dleaying is a far better income AND portfolio a erage balance and far higher success rate by delaying.

 

[Dtail]

On a related analysis, doesn't Firecalc give basically the same results with running SS at various ages with the relevant payouts while keeping the portfolios the same?

 

[Floridatennisplayer]

So much analysis and over analysis. You don’t know when you are going to die.
The government isn’t stupid. You aren’t beating their system. Mortality tables estimate the average age of death for men and women. It really doesn’t mean much of a total dollars difference when you take it. Take it early and you get more years of monthly checks. Wait and you get less checks but at a higher rate. It’s pretty much a wash. You are splitting hairs. Just relax and take it when you feel you need the money and be happy.

 

[street]

So much analysis and over analysis. You don’t know when you are going to die.
The government isn’t stupid. You aren’t beating their system. Mortality tables estimate the average age of death for men and women. It really doesn’t mean much of a total dollars difference when you take it. Take it early and you get more years of monthly checks. Wait and you get less checks but at a higher rate. It’s pretty much a wash. You are splitting hairs. Just relax and take it when you feel you need the money and be happy.

Exactly >>> I could live well with out SS but I won't I will try to get every dime back I gave SS. LOL

 

[aja8888]

So much analysis and over analysis. You don’t know when you are going to die.
The government isn’t stupid. You aren’t beating their system. Mortality tables estimate the average age of death for men and women. It really doesn’t mean much of a total dollars difference when you take it. Take it early and you get more years of monthly checks. Wait and you get less checks but at a higher rate. It’s pretty much a wash. You are splitting hairs. Just relax and take it when you feel you need the money and be happy.

Good practical advice above.

I would be more concerned about staying alive than about collecting SS. I am 74 and in good health (collecting SS since 64 years old). The problem is I see people around me dropping like flies at a much younger age. And some of them have been family.

 

[joeea]

It really doesn’t mean much of a total dollars difference when you take it.

It’s pretty much a wash.

That isn't always correct. For some families, it could mean hundreds of thousands of dollars difference.

If we were to choose to claim our benefits today rather than at 70, and both my wife and I live to 95, we would receive over $250k less than if we had waited.

Perhaps for some that's not much. For me, it's much.

If we both only live to 85, we still would receive over $70k less by claiming now.

For most (and particularly for a married couple), this isn't a decision to be made lightly.

 

[MoneyIsMyHobby]

... It's like trying to Calculate your Break Even amounts on Fire Insurance, Medical Insurance....etc.

LOL, I do calculate my break-even on insurance... at least to the extent "if I raise my deductible from 1000 to 2000 I have to go 3 years without and accident to come out ahead..." type of break even.

MIMH

 

[Perryinva]

Exactly. Some of those splitting hairs may be how the wealthy look at it. And if you are low income, most all from SS and single, then yes, it makes little difference on the average. But I would sure assume that everyone on this forum is way above average in education and wealth. Why would you asume that “its a wash” ? Thats like everyone pays the same percentage of taxes and recieve benefits up to $50k /yr, and then the taxes double after, with no benefit increase. So if you have 9 people that make $30k a year and one that makes $230k a year, on average make $50k/yr so everyone’s benefits should be adjusted so. I think the $230k/yr person might disagree that “its all a wash”, and we’re just splitting hairs. After all, it sounds great for 90% of the people.

There have been no changes to the rules of SS since about 1980. I think the actuarial data from 40 years ago might be a little dated so higher life expectancy will benefit those that have a better chance to see that which is typically higher income and better educated.

 

[jimandthom]

Haven't fully decided when to take SS yet, either 65/66 or wait longer. Did do the math on the GPO on DH pension. Not using COLAs (to keep it simple for my simple mind), he may be able to collect a spousal death benfit on my SS if I/we until 69 or 70 to collect.






Leaning towards collecting at 65 mostly for simplicity with medicare, but this could change and I'll wait till 66--but nothing further out.


We are going to be deferring a very small private pension held at the PBGC that he can inherit and that grows each year that it is not taken. That's where our deferral will happen.

 

[Rianne]

I'm taking the approach of my overall health. Right now it is pretty good, I'm 60 yr but I have a few health concerns. Not sure if anyone here is in perfect health. All it takes is a CT scan for instance, abdominal pain. They see just about everything on that scan. All of a sudden, a cyst here and there, a nodule on the lung, a lump...can be anything abnormal. Then what? Do you take action, or wait and see? Those darn scans open a can of worms. Some things were discovered on my CT scan that could shorten my life

That's why I think taking SS earlier than later works for me. I get it, SS is like a savings account that grows as you get older. But if you kick the bucket, you worked all those years and it cannot be passed into your estate. Yes, DS gets a portion. But passing the balance to charity or children, not going to happen. There are variables, will income surpass ACA benefits? Will income create much greater taxation? We're heading to tax accountant soon to analyze all this with the new tax code.

 

[Chuckanut]

Good practical advice above.

I would be more concerned about staying alive than about collecting SS. I am 74 and in good health (collecting SS since 64 years old). The problem is I see people around me dropping like flies at a much younger age. And some of them have been family.

+1

I fully understand that many people with limited retirement means have to acquire and squeeze every dollar they can.

I am taking SS at 70 for several reasons. One is most of my ancestors lived into their late 80's and 90's. The few exceptions died of things that are much more easily treatable today. Another, is that the 'extra' SS money is part of my LTC plan. If I need LTC, the extra money will come if handy. If not, I can blow the dough!

Back in my mid to late 50's, over a period of five years, I lost 3 good friends to disease, and two more suffered life changing health problems. I also lost a very close relative who was younger than I. It's one of the reasons I decided to bail out a bit early and FIRE.

Fussing over the last dollar of SS benefits or getting upset that one won't break even is OK, just don't let it get in the way of life.

 

[Dtail]

+1

I fully understand that many people with limited retirement means have to acquire and squeeze every dollar they can.

I am taking SS at 70 for several reasons. One is most of my ancestors lived into their late 80's and 90's. The few exceptions died of things that are much more easily treatable today. Another, is that the 'extra' SS money is part of my LTC plan. If I need LTC, the extra money will come if handy. If not, I can blow the dough!

Back in my mid to late 50's, over a period of five years, I lost 3 good friends to disease, and two more suffered life changing health problems. I also lost a very close relative who was younger than I. It's one of the reasons I decided to bail out a bit early and FIRE.

Fussing over the last dollar of SS benefits or getting upset that one won't break even is OK, just don't let it get in the way of life.

+1
For me it is all about the tax efficiencies and longevity, but NOT about whether I get back the monies I paid in and am entitled to.

 

[CRLLS]

SS is actuarially neutral for an individual. Excluding most all other outside factors, it makes little difference when to start SS. Once you start including those outside factors and plans, there are significant differences. For example, a married couple's survivor's benefits, assuming a fair difference between earnings over their lifetime, certainly swing the pendulum into favoring delaying. That is, if you can afford to delay. That is because the average life expectancy of the last survivor of a couple is greater than an individual, which the SS does not consider in their numbers AFAIK. Another example is women. While it is generally accepted that the average woman lives longer than the average man, the SS doesn't differentiate in their calculations. Women, based on just being women, will automatically live longer than the SS's breakeven age.

In the end, we don't know when we will leave this earth (or become parts of it), what the market will do in the mean time, or any number of other variables. 100% accurate numbers cannot be calculated. We must take a few wild guesses and punt. When it comes down to individual experieinces, averages do not apply.

 

[Cut-Throat]

So much analysis and over analysis. You don’t know when you are going to die.
The government isn’t stupid. You aren’t beating their system. Mortality tables estimate the average age of death for men and women. It really doesn’t mean much of a total dollars difference when you take it. Take it early and you get more years of monthly checks. Wait and you get less checks but at a higher rate. It’s pretty much a wash. You are splitting hairs. Just relax and take it when you feel you need the money and be happy.

Based on this line of thinking.... Americans should only plan their retirement until the "average age of death for men and women".

 

[Perryinva]

SS is actuarially neutral for an individual. Excluding most all other outside factors, it makes little difference when to start SS. Once you start including those outside factors and plans, there are significant differences. For example, a married couple's survivor's benefits, assuming a fair difference between earnings over their lifetime, certainly swing the pendulum into favoring delaying. That is, if you can afford to delay. That is because the average life expectancy of the last survivor of a couple is greater than an individual, which the SS does not consider in their numbers AFAIK. Another example is women. While it is generally accepted that the average woman lives longer than the average man, the SS doesn't differentiate in their calculations. Women, based on just being women, will automatically live longer than the SS's breakeven age.

In the end, we don't know when we will leave this earth (or become parts of it), what the market will do in the mean time, or any number of other variables. 100% accurate numbers cannot be calculated. We must take a few wild guesses and punt. When it comes down to individual experieinces, averages do not apply.

While +1 for the last part, the first sentence is totally wrong. It is absolutely not actuarially neutral for an individual. It is neutral for a VERY large group. That’s how it works. Where you believe you fall in to the group is what should provide the path you take. A long genetically dispositioned lifed childless healthy active couple has a totally different take on it than a single overweight sedentary male with a family history of heart disease and cancer. But they are part of the same actuarial group. So no, it is not the same and make little difference which ever path you take. One can make intelligent decisions by basing it on the odds. One CAN still lose with a 10 to 1 for, but why would you bet that way?

 

[Andre1969]

On a related analysis, doesn't Firecalc give basically the same results with running SS at various ages with the relevant payouts while keeping the portfolios the same?

I remember running my own numbers awhile back, and for me, it didn't make much difference whether I took SS at 62, 70, or anywhere in between. But, in my case, I'm hoping to be retired by age 51 at the latest, and will probably only be doing around 3% SWR. SS, when I do finally get it, is going to be a pretty small slice of the overall pie. As a result, when I decide to take it just doesn't have much bearing on anything else.

However, for someone who's going to be more dependent on it, when you take it will probably have a greater effect. And I think when you're married (I'm single), there are more variables.

 

[ncbill]

FRA (67) for me...since it will be spousal benefit, don't qualify on my own record.

 

[haha]

There have been no changes to the rules of SS since about 1980. I think the actuarial data from 40 years ago might be a little dated so higher life expectancy will benefit those that have a better chance to see that which is typically higher income and better educated.

One thing is a dead cert in all of these SS discussions. Lots of heat, very little light.

Ha

 

[Perryinva]

Mwahahaha. You got that right.

For my personal circumstance the difference in income or success rate is significant enough higher by delaying that it is worth it. I run FIRECALC all the time, as an exercise in what if. For the same income my success rate is 88% file at 62 , 98% file at 67, 100% at 70. OR conversely I can choose a higher income from age 62 on for the same success rate by funding my own SS until I claim. About 7k/yr according to FIRECALC which seemed a little high to me. Everyone is unique, but not even close for me.