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Old 09-30-2011, 07:55 PM   #61
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Originally Posted by want2er View Post
According to SS website my #s are.....

$1648.....at age 62
$2339.....at FRA (66 & 4mo)
$3047.....at age 70

I know that each payment is calculated on the premise that I work until I begin collecting SS. Would someone please explain how to calculate my payments if I stop work at 62, but don't collect until FRA or age 70. I don't see this on SS website.

Thanks!
The adjustments for early and late retirement are straightforward:

If you stop working before age 62, then your benefit if you start at 62 will be 73.3% of your benefit if you start at 66 & 4 mo. Retirement benefits by year of birth

OTOH, if you wait until 70, your benefit will be 129.3% of your benefit at 66+4 Delayed Retirement: If you were born in 1956

The complication is getting your benefit at 66+4. That requires the indexing system that ReWahoo mentioned. As he suggested, most people on this board will have either 35 years of pretty good earnings or high enough earnings to put them in the 15% marginal benefit bracket, so the impact is small. The rules are here: Primary Insurance Amount
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Is Life Expectancy Correct?
Old 10-02-2011, 03:55 AM   #62
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Is Life Expectancy Correct?

In the UK, where I'm from, we distinguish between cohort and period life expectancy

I think the figures given on the US Social Security Site are all period figures. In other words they assume, for the purposes of the calculation, that life expectancy stops improving and stays constant for the rest of time. The US figure for a male age 65 (18.7 years) is certainly very similar to the UK figure (18.6) calculated on a period basis. On a cohort basis, assuming that life expectancy continues to improve at the rate recently experienced, the figure in the UK is 21.6 years.

If I'm correct, deferring SS commencement looks a much better deal.

The second point I'd make about life expectancy, based on experience in the UK, is that it is strongly correlated with wealth and income. This makes it much more likely that anyone interested in FIRE will live for longer than the average.

Third, those people who are looking at the age at which people in their family have died, and are using that to estimate, in a rough way, their likely age at death, are also failing to allow for improvements in life expectancy. These have averaged about 1 year in 8, so about 3 or 4 years a generation.

Add this all up, and ignoring political risks, deferring SS looks a much better deal.
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Old 10-02-2011, 04:17 AM   #63
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Welcome to ER.org, Stargazer

I trust that you are enjoying our hottest start to October on Record.

Britons cool off in October heat wave - Telegraph

Feel free to introduce yourself in the Hi, I am Forum
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Old 10-02-2011, 10:18 AM   #64
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I trust that you are enjoying our hottest start to October on Record.
Wow, a blistering 86F!

I saw a photoblog on a news site about this weather phenomenon. One photo caught my eye due to several topic-rich features...
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Old 10-02-2011, 10:19 AM   #65
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You may now return to your regularly scheduled SS debate...
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Old 10-02-2011, 10:20 AM   #66
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I like my fries a little more crispy.
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Old 10-02-2011, 10:38 AM   #67
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Wow, a blistering 86F!

I saw a photoblog on a news site about this weather phenomenon. One photo caught my eye due to several topic-rich features...
In hot weather fish and, er, chips, are very popular.
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Old 10-02-2011, 10:46 AM   #68
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In hot weather fish and, er, chips, are very popular.
Is that what you call those things over there?
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Old 10-02-2011, 10:54 AM   #69
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Is that what you call those things over there?
They do where I come from

I remember being very disappointed when I saw a movie called "Goodbye Mr Chips", and found out it was about a school teacher
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Old 10-03-2011, 09:08 PM   #70
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Originally Posted by Stargazer57 View Post
In the UK, where I'm from, we distinguish between cohort and period life expectancy

I think the figures given on the US Social Security Site are all period figures. In other words they assume, for the purposes of the calculation, that life expectancy stops improving and stays constant for the rest of time. The US figure for a male age 65 (18.7 years) is certainly very similar to the UK figure (18.6) calculated on a period basis. On a cohort basis, assuming that life expectancy continues to improve at the rate recently experienced, the figure in the UK is 21.6 years.

If I'm correct, deferring SS commencement looks a much better deal.

The second point I'd make about life expectancy, based on experience in the UK, is that it is strongly correlated with wealth and income. This makes it much more likely that anyone interested in FIRE will live for longer than the average.

Third, those people who are looking at the age at which people in their family have died, and are using that to estimate, in a rough way, their likely age at death, are also failing to allow for improvements in life expectancy. These have averaged about 1 year in 8, so about 3 or 4 years a generation.

Add this all up, and ignoring political risks, deferring SS looks a much better deal.
The US SS actuaries provide both cohort and period life expectancy data. For example, section 5 here: 2010 Trustees Report: Section V.A, Demographic assumptions & methods

They also do research on the mortality differentials by lifetime earnings: Trends in Mortality Differentials and Life Expectancy for Male Social Security-Covered Workers, by Socioeconomic Status

So the data is there. But, you are correct, lots of people do not use this information when making their own plans.

One other complication is that any population table ignores the effects of selection. The mere fact that someone is thinking about "average" life expectancies indicates that person doesn't have serious health problems, and hence is in a better than average pool.
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Old 10-03-2011, 10:30 PM   #71
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I'm definately taking my SS at age 62 while it is still there and invest it in the best place at that time. Be it bond, mkt, or bank.

Anyhow....they are saying there will probably be a 3% increaes in SS in 2012. I will begin SS in Jan. of 2012, will my SS calcualtions be increased 3% or is the increase only for people who already were receiving SS?

Maybe someone who worked for SS can answer this.
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Old 10-03-2011, 11:02 PM   #72
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I'm definately taking my SS at age 62 while it is still there and invest it in the best place at that time. Be it bond, mkt, or bank.

Anyhow....they are saying there will probably be a 3% increaes in SS in 2012. I will begin SS in Jan. of 2012, will my SS calcualtions be increased 3% or is the increase only for people who already were receiving SS?

Maybe someone who worked for SS can answer this.
I'm curious - - Suppose you were beginning SS right now instead of 3 months from now. Of the places you mention, where would you invest it today, and what returns would you expect? I am not trying to say that you are wrong, just curious.
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Old 10-03-2011, 11:07 PM   #73
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I'm curious - - Suppose you were beginning SS right now instead of 3 months from now. Of the places you mention, where would you invest it today, and what returns would you expect? I am not trying to say that you are wrong, just curious.
I don't want to answer for Heirloom but I don't think too many people are taking SS to invest it. I for one will be taking it to bring down my withdrawal rates and stop the bleeding.
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Old 10-03-2011, 11:09 PM   #74
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I don't want to answer for Heirloom but I don't think too many people are taking SS to invest it. I for one will be taking it to bring down my withdrawal rates and stop the bleeding.
That is why I was curious to find out more about her plan, since she said she would invest it. Maybe I misunderstood.
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Old 10-03-2011, 11:11 PM   #75
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That is why I was curious to find out more about her plan, since she said she would invest it. Maybe I misunderstood.
No, you are correct, Heirloom did want to invest it. I don't understand why anyone would want to take it at 62 to invest it in this climate. If anything I'd be waiting till a later date if I didn't have any need for my SS.
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Old 10-03-2011, 11:19 PM   #76
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No, you are correct, Heirloom did want to invest it. I don't understand why anyone would want to take it at 62 to invest it in this climate. If anything I'd be waiting till a later date if I didn't have any need for my SS.
SS is such a difficult issue for all of us who are around age 62 or so right now. There seem to be a lot of different opinions and strategies. I'm 63 and haven't claimed it yet, but I am "on the fence" so it interests me.
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Old 10-03-2011, 11:23 PM   #77
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Originally Posted by heirloom View Post
I'm definately taking my SS at age 62 while it is still there and invest it in the best place at that time. Be it bond, mkt, or bank.

Anyhow....they are saying there will probably be a 3% increaes in SS in 2012. I will begin SS in Jan. of 2012, will my SS calcualtions be increased 3% or is the increase only for people who already were receiving SS?

Maybe someone who worked for SS can answer this.
I never worked for SS, but I think you will not be at any disadvantage for getting the approx. 3% COLA, whether you start SS sooner or later. I am investing my SS payments, started 11/09 at my age 67.5, in case you're interested, not because I'm worried about the SS system suddenly going into default, but just because I don't happen to need SS for living expenses. I put my SS payments into the stock market.
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Old 10-03-2011, 11:30 PM   #78
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I'm already getting a pension check and a severance pay. Plus unemployment because they eliminated my job. So.....I won't need the SS, just want to apply while I still can and before they try hiking the age .

My bank pays 2% interest in a check/savings account up to $20K. I'll put it there while I"m waiting for the mkt. to settle and then invest it in a roth IRA. I can still get an IRA for this year since I only retired in June. My husband is waiting until Feb. of next year so we can add to the IRA for next year.

People on this site were talking about I bonds. The ones you get in October pay 0.0 interest plus 2.4% inflation interest twice a yr. I was thinking of putting some there if the mkt doesn't settle next year. If it does, put it in a good dividend paying stock.

I already have intel, ge, msft, pfe, csco. I am hoping GIS or MO go down a little because they both perform very good. OR VZ is good too. But I really can't believe GIS, it still goes up even though the other staple stocks are going down.
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Old 10-03-2011, 11:45 PM   #79
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Thanks, heirloom. Like you, I worry that the rules might change if I wait. I am hanging on for now (worried about living to a very old age too), but I definitely understand why you would prefer to have it in hand even in a declining market.
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Old 10-03-2011, 11:48 PM   #80
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My bank pays 2% interest in a check/savings account up to $20K.
That's pretty good, these days -- much more than my bank pays.

I see many recommendations for I-bonds from others here, but I know little about them, myself. My own investments are almost entirely mutual common stock funds.
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