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Break-even SS 62 vs 66 vs 70 calculators ?
Old 01-10-2018, 03:16 PM   #1
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Break-even SS 62 vs 66 vs 70 calculators ?

Any suggestions to a simple but reliable calculator to compare Social Security benefits. e.g. 62 vs 66 vs 70 ?

Thx
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Old 01-10-2018, 03:19 PM   #2
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Originally Posted by wanaberetiree View Post
Any suggestions to a simple but reliable calculator to compare Social Security benefits. e.g. 62 vs 66 vs 70 ?

Thx
The best one I've seen...... All you need to know is your FRA amount and when you're going to die.

SSAnalyze - Bedrock Capital Management
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Old 01-10-2018, 03:25 PM   #3
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I used a simple spreadsheet that tallied the 3 columns to see where each colum matched or was greater than the other/s.
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Old 01-10-2018, 03:27 PM   #4
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and when you're going to die.
trying to figure that out has been killing me lately
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Old 01-10-2018, 03:37 PM   #5
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Originally Posted by wanaberetiree View Post
Any suggestions to a simple but reliable calculator to compare Social Security benefits. e.g. 62 vs 66 vs 70 ?

Thx
When do you plan to die?
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Old 01-10-2018, 03:41 PM   #6
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trying to figure that out has been killing me lately
I see what you did there... and I liked it!
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Old 01-10-2018, 03:53 PM   #7
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The best one I've seen...... All you need to know is your FRA amount and when you're going to die.

SSAnalyze - Bedrock Capital Management
SSAnalyze is pretty good, but makes a few odd assumptions that you may wish to override.

For example, it assumes a COLA of 2.39% because that's the average COLA for the past 25 years.
Yet it assumes a discount rate of 2% because they say that's a rouge approximation of future inflation.

I have no idea why one value uses an average of past years and the other uses an estimate of future years.

And I have no idea why they would estimate that COLA is higher than inflation. That seems unlikely to occur.
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Old 01-10-2018, 03:54 PM   #8
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The best one I've seen...... All you need to know is your FRA amount and when you're going to die.
...., and what investment returns you'll get in the future.
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Old 01-10-2018, 04:18 PM   #9
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...., and what investment returns you'll get in the future.
I'm not seeing any 'Investment returns' - Just cost of living and Inflation for the SS Payouts.... Which I set to zero.

Bottom Line... If you understand how SS works, you should not even be calculating Break Even Age... It's like trying to Calculate your Break Even amounts on Fire Insurance, Medical Insurance....etc.
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Old 01-11-2018, 10:48 AM   #10
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SSAnalyze is pretty good, but makes a few odd assumptions that you may wish to override.

For example, it assumes a COLA of 2.39% because that's the average COLA for the past 25 years.
Yet it assumes a discount rate of 2% because they say that's a rouge approximation of future inflation.

I have no idea why one value uses an average of past years and the other uses an estimate of future years.

And I have no idea why they would estimate that COLA is higher than inflation. That seems unlikely to occur.
Agree, sounds like will have to do own spreadsheet
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Old 01-11-2018, 10:58 AM   #11
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Agree, sounds like will have to do own spreadsheet
You don't need to accept the defaults. You can put in whatever value you would use in your spreadsheet if you prefer.
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Old 01-11-2018, 11:24 AM   #12
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Bottom Line... If you understand how SS works, you should not even be calculating Break Even Age... It's like trying to Calculate your Break Even amounts on Fire Insurance, Medical Insurance....etc.
+1

Even the "I" in OASDI (the official name for Social Security) stands for "Insurance". It's not as simple as comparing it to an annuity or a bond.

Well before you file for it, even decades before you retire, you already are reaping some of its benefits. They may be intangible, just like insurance coverage provides coverage on which you may never make a claim, but that doesn't mean they aren't real.
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Old 01-11-2018, 11:26 AM   #13
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+1

Even the "I" in OASDI (the official name for Social Security) stands for "Insurance". It's not as simple as comparing it to an annuity or a bond.

Well before you file for it, even decades before you retire, you already are reaping some of its benefits. They may be intangible, just like insurance coverage provides coverage on which you may never make a claim, but that doesn't mean they aren't real.
I don't get this point.
Walk me thru how you would decide when to start taking SS pls ?
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Old 01-11-2018, 11:58 AM   #14
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I don't get this point.
Walk me thru how you would decide when to start taking SS pls ?
Here's my thinking.

DW is likely to outlive me. So, since I view SS as insurance, in this case longevity insurance, I plan to take it at 70 to preserve the maximum buffer for her. DW will be okay.

Of course, if I croak on the way home this evening, I won't be able to fulfill that plan; nowhere near 70 yet. But OTOH, she'll get a survivor benefit right away. Again, I'm viewing it as insurance.

Also, if I don't die right away but still croak before 70, it'll be fewer years that I'd be imposing my maintenance costs (food and beer, mostly) on our portfolio. So DW wins again!

When I buy insurance, I'm know I'm choosing an option which is guaranteed to cost something in return for reducing a possible loss which could potentially be larger.

Maybe I'm not succeeding, but I'm at least trying to be consistent in my approach to managing risk. For example, I am constructing a retirement kitty to last for about 30 years. Over a thirty year period, equities are likely to substantially outperform debt instruments, but I nonetheless will keep some fixed income assets in my AA. I'm sacrificing some potential growth to reduce some downside risk.

Anyway, that's my reasoning. Perhaps I'm full of chicken salad, but this was my thought process.
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Old 01-11-2018, 12:12 PM   #15
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When I buy insurance, I'm know I'm choosing an option which is guaranteed to cost something in return for reducing a possible loss which could potentially be larger.

Maybe I'm not succeeding, but I'm at least trying to be consistent in my approach to managing risk. For example, I am constructing a retirement kitty to last for about 30 years. Over a thirty year period, equities are likely to substantially outperform debt instruments, but I nonetheless will keep some fixed income assets in my AA. I'm sacrificing some potential growth to reduce some downside risk.
IMHO, this is exactly the right way to think about it.
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Old 01-11-2018, 12:20 PM   #16
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IMHO, this is exactly the right way to think about it.
+100 Me, too.
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Old 01-11-2018, 12:26 PM   #17
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You can't solve for breakeven age because there is more than one variable. It depends on inflation, how much you invest, how your assets are invested, and how much they grow. Basically, if you think that you will be short-lived, take it early. If you need the money to survive, take it early. If you think you will have an average life span, take it at FRA. You get the full benefit of delaying to 70 if you live longer than the average bear. Regardless, if you can afford it, I would delay to 70 because I consider SS as longevity insurance and there is no annuity with a guaranteed 8% growth from 67 to 70 with annual COLA increases.
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Old 01-11-2018, 12:28 PM   #18
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I think you do want to know the breakeven point. SS isn't like fire insurance, which you will hopefully never use, but if you do it may pay off big. SS will start paying whenever you start taking it between 62-70.


I also like the longevity insurance aspect, but I still want to know when I might break even. If it's not until I'm 115, then it's not very good longevity insurance.


I've made my own spreadsheet, so I can factor in investment return (to account for keeping more invested if I take SS early), inflation rate for SS benefit increases, and possible benefit reductions at some point in the future.
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Old 01-11-2018, 01:53 PM   #19
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I guess I am missing something here

Why is SS like insurance? To me it's a source of income.
Say you have completed required amount of units and @62 you may get $1800, @67 - $2800 and @70 - $3100

Sure you will need to account for inflation (maybe yes or not) and life expectation. But why this math problem requires anything else?

If you define your goal as - max amount of $'s received over the total life.

Wrong?
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Old 01-11-2018, 02:06 PM   #20
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I guess I am missing something here

Why is SS like insurance? To me it's a source of income.
Say you have completed required amount of units and @62 you may get $1800, @67 - $2800 and @70 - $3100

Sure you will need to account for inflation (maybe yes or not) and life expectation. But why this math problem requires anything else?

If you define your goal as - max amount of $'s received over the total life.

Wrong?
Think of it as "Old Age Insurance".... Yes, you get income at age 62, but by waiting until age 70, you'll get much more.... You are insuring that you'll have more money if you live a long time. No one knows the length of 'Total Life' as you say, so you buy a little insurance.

Basically it's the same reason that people Plan their withdrawal amounts and plan out to age 100, even though most people don't live that long. If someone told you that their financial plan ended at at age 80, you'd probably warn them, that they and their spouse may live a lot longer than that.....But for some reason when it comes to S.S. there are a lot of people that take the early amount and fail to insure that they may live a lot longer.... (The exception are people, who are so broke, that they cannot afford to delay the benefit)
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