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Old 05-21-2013, 01:31 PM   #21
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The higher payments associated with delaying receipt of SS until after 62 were designed to be actuarialy fair -- but this was done some time ago when interest rates were much higher. As a result, if you want an annuity larger than the one you get from Social Security at 62, your best bet is to delay Social Security as the payoff is much better than purchasing an annuity.
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Old 05-21-2013, 01:39 PM   #22
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The Big Decision: When To Take Social Security - Forbes

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Here’s where claiming strategies can get really complicated—and where understanding the Social Security rules is even more important. Remember that supposed actuarial equivalence of early and delayed benefits? It doesn’t take into account the favorable way Social Security treats married couples. If one partner dies, the survivor can claim the deceased spouse’s check instead of his or her own, assuming the dead spouse’s check is bigger. This is crucial because of something known in the actuarial and insurance businesses as joint mortality: With two individuals, there’s a greater chance that at least one of them will live to a ripe old age and collect that bigger check. The upshot: At least one partner (usually the higher earning one) should delay benefits well past 66, to buy that higher lifetime “second-to-die” annuity for both of them.
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Old 05-21-2013, 02:22 PM   #23
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I've seen these points before about delaying SS until 66 or 70. In my view, they're lottery gambles to convince us to wait as long as possible, where a good percentage of folks will never realize, enjoy, or appreciate these delayed benefits in their very old age.

I still believe (in my situation anyway) in taking what you've earned and contributed while you can, and enjoy and use the money. Why let Uncle Sam keep your lifelong contributions until you're feeble, and if you pass away before break even (or even starting it at 70), never realizing your benefits?
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Old 05-21-2013, 03:37 PM   #24
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This actually feeds into what I think we'll do. My wife is older than I am and and I made more money than she did. We'll have her take her SS at 62 then we'll wait 16 years for me to take mine at 70. This way, we get a little extra cash for a while, and treat my SS as the longevity insurance.
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Old 05-21-2013, 03:40 PM   #25
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I've collected social security since 62 and dang if my heart didn't stop after collecting less than a years worth. SS doesn't play much of a role in our retirement, but it does make me feel good to get as much back from Unca Sam as is good and legal. You just never know.
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Old 05-21-2013, 05:14 PM   #26
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...Why let Uncle Sam keep your lifelong contributions until you're feeble, and if you pass away before break even (or even starting at 70) never realize your benefits?
Because catfood sucks. That's why they call it the Old Age, Survivors And Disability Insurance Program. Those who die before receiving benefits help subsidize those who survive - that is the way insurance works.

Yes, Richard, there is a vast conspiracy in the media and government to lead you down a primrose path to take SS later and get shortchanged so the smart thing to do is to jump on it while you can. Besides, taking it early will make the whole system more sustainable, so thank you.
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Old 05-21-2013, 05:51 PM   #27
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Because catfood sucks. That's why they call it the Old Age, Survivors And Disability Insurance Program. Those who die before receiving benefits help subsidize those who survive - that is the way insurance works.

Yes, Richard, there is a vast conspiracy in the media and government to lead you down a primrose path to take SS later and get shortchanged so the smart thing to do is to jump on it while you can. Besides, taking it early will make the whole system more sustainable, so thank you.
Conspiracy? Interesting you think so (as you say here). If waiting to 70 makes you feel more secure in avoiding cat food, then scratch that Friskies off your old age menu.
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Old 05-21-2013, 05:55 PM   #28
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I've seen these points before about delaying SS until 66 or 70. In my view, they're lottery gambles to convince us to wait as long as possible, where a good percentage of folks will never realize, enjoy, or appreciate these delayed benefits in their very old age.
...
It's all the same to SS if people take their benefits early, late or in between. I really doubt anyone cares when you or I choose to file.
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Old 05-21-2013, 06:01 PM   #29
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....... I really doubt anyone cares when you or I choose to file.
I know that I don't.
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Old 05-21-2013, 06:11 PM   #30
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It's all the same to SS if people take their benefits early, late or in between. I really doubt anyone cares when you or I choose to file.
I think the investment companies have a vested interest in keeping people working and saving money rather than retiring early and spending down their portfolios or living on SS for income.

The article on that was posted here from the UK recently on how people were unhappy and died who retired early so working til 70 was better seemed like a pure propaganda piece to me.
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Old 05-21-2013, 06:54 PM   #31
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I know that I don't.
Wha....?
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Old 05-21-2013, 07:37 PM   #32
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Wha....?
I think that people (not you) get a little too cranked up over this. In the end we are all dead.
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Old 05-21-2013, 07:59 PM   #33
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Because catfood sucks. That's why they call it the Old Age, Survivors And Disability Insurance Program. Those who die before receiving benefits help subsidize those who survive - that is the way insurance works.
Deferring SS until 70 is my longevity insurance and takes the place of a annuity in later life. I'd rather back end load my SS to the time when I won't be physically capable of working.
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Old 05-21-2013, 09:37 PM   #34
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I've seen these points before about delaying SS until 66 or 70. In my view, they're lottery gambles to convince us to wait as long as possible, where a good percentage of folks will never realize, enjoy, or appreciate these delayed benefits in their very old age.

I still believe (in my situation anyway) in taking what you've earned and contributed while you can, and enjoy and use the money. Why let Uncle Sam keep your lifelong contributions until you're feeble, and if you pass away before break even (or even starting it at 70), never realizing your benefits?
This thread seems to have morphed. The first post said "I'll assume SS retirement dates are actuarially equivalent, but here's an interesting FIT angle". This post seems to say they aren't equivalent.

But, since I had a worksheet, I dug it out. Here are some numbers.

Assume I'm married, trying to get $50k of annual gross income from some combination of ordinary income (IRA, pension) and Social Security. We've got $21k of SS if we start at 62 and $28k if we start at 66.

If we start at 62, we'll need $29k of non-SS income to get up to $50k.
Only $3,750 of our SS will be taxable, so our AGI is $32,750.
Assuming standard deduction, we've got $12,950 of taxable income, our marginal bracket is 10%, and our FIT is $1,295.

If we defer to 66, then in the four years prior to 66 we'll need $50k of non-SS income.
That generates $50,000 of AGI,
$30,200 of taxable income,
a marginal bracket of 15%, and a FIT is $3,638.

After the first four years, we'll need $22k of non-SS income.
Only $2,000 of the SS is taxable, for an AGI of $24,000,
taxable income of $4,200,
and FIT of $420.

If I did all those numbers correctly (no guarantees) in the start-at-62 scenario we'll pay $1,295 every year. In the defer-to-66 we'll pay $3,638 for four years, and $420 thereafter.

I won't claim that one is clearly better than the other.

Note, however, that this ignores the fact that the $32k and $44k trigger points aren't inflation indexed. So taxes in all cases go up as inflation shrinks those numbers. That's an additional complication.

I was targeting a higher income than $50k. After looking at various scenarios, I thought there were too many variables to predict with much accuracy.
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Old 05-22-2013, 08:00 AM   #35
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My pet peeve is married people who disregard the effects of delaying SS on the survivors benefit.
Our choice is a no brainer ... wait as long as possible to tap my SS. DW is 7 years younger and will have a much smaller SS check. So my much larger SS should be maximized to carry her as long as possible. But tap hers ASAP ... however small.
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Old 05-22-2013, 03:39 PM   #36
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Getting my first gummint SS payment (at 62) in 21 days!

DW got her's in Feb.

Its all G.
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Old 05-22-2013, 05:17 PM   #37
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Old 05-22-2013, 10:47 PM   #38
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Can someone confirm if the following is true?

You retire early at 62 based on your working record. Your spouse retires a number of years later at 66 (her FRA), and can then receive half of your FRA (age 66) benefit, even though you retired early at 62.

This rule (if true) was never clear to me.
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Old 05-23-2013, 06:59 AM   #39
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You retire early at 62 based on your working record. Your spouse retires a number of years later at 66 (her FRA), and can then receive half of your FRA (age 66) benefit, even though you retired early at 62
We have done this same thing. DW began drawing at 62. At my FRA I began to draw my spousal benefit. I will let my own benefit continue to increase and switch over to it at a later date.
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Old 05-23-2013, 07:08 AM   #40
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We have done this same thing. DW began drawing at 62. At my FRA I began to draw my spousal benefit. I will let my own benefit continue to increase and switch over to it at a later date.
Great, thank you. Although no subsequent switchover planned for my spouse as a homemaker.
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