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Clear article about when to take Social Security
Old 04-20-2019, 02:05 PM   #1
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Clear article about when to take Social Security

Its title is hyperbole but this article lays out concisely and cleanly the trade offs around taking SS at 62, Full Retirement Age (FRA) or age 70. Circumstances willing, DW and I are aiming for 70 when, according to this article and other calculators, we can claim 132% of the FRA amount.

https://www.fool.com/amp/retirement/...youll-eve.aspx
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Old 04-20-2019, 03:33 PM   #2
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No, it really doesn't, because it doesn't show how much the $12K you'd leave in your investment account would be earning if you took SS at 62. It's a very simple picture, and it doesn't do a real world comparison.
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Old 04-20-2019, 03:57 PM   #3
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No, it really doesn't, because it doesn't show how much the $12K you'd leave in your investment account would be earning if you took SS at 62. It's a very simple picture, and it doesn't do a real world comparison.
Over a relatively short time period (5-8 years), you don’t know what your return will be. SS is guaranteed, so for a fair comparison you would need to compare to CDs, etc. Not a significant, amount especially when you consider inflation would eat up any investment returns.
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Old 04-20-2019, 03:59 PM   #4
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and we're off...
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Old 04-20-2019, 04:10 PM   #5
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I'll take annuities for $500, Alex !
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Old 04-20-2019, 04:19 PM   #6
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and we're off...
Not me, I've said what I had to say and will put the thread on ignore. I took a look because sometimes the Motley Fool has good insight, or at least used to, but this is just basic math, too simple to apply in the real world. Out.
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Old 04-20-2019, 04:45 PM   #7
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and we're off...
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Old 04-20-2019, 05:13 PM   #8
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No, it really doesn't, because it doesn't show how much the $12K you'd leave in your investment account would be earning if you took SS at 62. It's a very simple picture, and it doesn't do a real world comparison.
Here is chart at 5% interest. Shows about the same amount at 87-89 yrs.
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Old 04-20-2019, 05:38 PM   #9
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Here is chart at 5% interest. Shows about the same amount at 87-89 yrs.
Nice calculation. The conventional wisdom of taking SS at 70 is the best is questionable unless you could live beyond 90 years. Why not take it earlier than 70 since longevity is uncertain?
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Old 04-20-2019, 05:42 PM   #10
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Nice calculation. The conventional wisdom of taking SS at 70 is the best is questionable unless you could live beyond 90 years. Why not take it earlier than 70 since longevity is uncertain?
Based on that reasoning, no reason to save for retirement, you could die beforehand, in fact some people will.

But I'm stupid when I was 40, I saved for retirement...
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Old 04-20-2019, 07:35 PM   #11
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No brainer for me as my job ended making 22k/year (part time) and 65 so took my 363/month due to WEP.
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Old 04-20-2019, 08:58 PM   #12
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When to apply for SS is a personal decision for each person. Math and break even points don't really address the reasons some people file early, and some file later. Once you know the amount at different ages, I think most grown ups can decide when to apply. But then we have to throw in spousal benefits, survivor benefits, possible payment reductions in 2035..... What seems like
an easy decision gets complicated quickly. I would also like to know how many people who took the age 62 route actually invested the extra money without spending any of it. If it works for you, go for it.
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Old 04-20-2019, 10:12 PM   #13
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Based on that reasoning, no reason to save for retirement, you could die beforehand, in fact some people will.

But I'm stupid when I was 40, I saved for retirement...
Not true. You still need to save for retirement even though longevity is uncertain. You still need to plan to live to a certain age and save accordingly to prevent outliving your money. Since the average life expectancy is about 85, why wait for claiming SS at 70 when the break even point is about 90? Even if you live beyond 90, say 100, the difference in total SS payment is not that significant.

Obviously, if you plan to live to 100, claiming SS at 70 is optimal.
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Old 04-20-2019, 10:30 PM   #14
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Not true. You still need to save for retirement even though longevity is uncertain. You still need to plan to live to a certain age and save accordingly to prevent outliving your money. Since the average life expectancy is about 85, why wait for claiming SS at 70 when the break even point is about 90? Even if you live beyond 90, say 100, the difference in total SS payment is not that significant.

Obviously, if you plan to live to 100, claiming SS at 70 is optimal.
You made me wonder, what is the break even point.
This site says it's 77 which is much younger than the 90 yr old one I've never heard quoted until now.
The Social Security break-even age is 77
This site compares age 62 to 65, and probably only considers how much you get.
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Old 04-20-2019, 10:34 PM   #15
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Seems like the average life expectancy is a lot lower as well:
Life Expectancy: Why It Dropped in the U.S. This Year | Fortune

"The new average life expectancy for Americans is 78.7 years".

Which of course fits roughly with the SS break-even point of payout amounts.
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Old 04-20-2019, 10:46 PM   #16
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Even if you live beyond 90, say 100, the difference in total SS payment is not that significant.
Didn't Einstein say something like: Not everything that counts can be measured, and not everything that can be measured, counts

That sums up the argument for me. Somebody can show me a chart with calcs brought forth with much huffing and puffing showing me that if I live so long and if I start SS at one time it's "better" than starting it another.... and I'll say: So? Why do you think chump change is of any significance to someone who, long ago, stopped needing to worry about such chump change?

Which is harder to lift? A ton? Or 2100 pounds? Or two tons for that matter? The answer is for any normal person in a normal situation they will both feel equally heavy.
One is not more than the other.
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Old 04-20-2019, 10:48 PM   #17
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we both pulled at 62. we sock it away to be used for our quarterly tax payments in the following year. daily living is off our pensions. investment and retirement portfolios are for a rainy day. RMD’s start in 2-yrs.
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Old 04-20-2019, 11:04 PM   #18
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You made me wonder, what is the break even point.
This site says it's 77 which is much younger than the 90 yr old one I've never heard quoted until now.
The Social Security break-even age is 77
This site compares age 62 to 65, and probably only considers how much you get.
Comparing filing at age 66 with age 70, the break even point is at age 82. It might be 90 if the payments were invested with a return of 5%, which may not be possible. As another poster stated, there are many factors, i.e., spousal SS benefits, spousal survivor benefit, longevity risk, investment risk, etc to consider in order to decide when to claim SS.
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Old 04-21-2019, 12:26 AM   #19
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This decision is almost becoming a moot point to us. Our FIRECalc is at 100% without cashing in on SS. My current thought is to start taking it at 67 for both of us (DW & I are of same age, DW gets 1/2 of what I get) for no other reason than I don't want to think about it. The total $$$$ difference in when to start taking SS has insignificant impact to our retirement finance or yearly budget. But it is always interesting to think what others are thinking.
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Old 04-21-2019, 05:19 AM   #20
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Seems like the average life expectancy is a lot lower as well:
Life Expectancy: Why It Dropped in the U.S. This Year | Fortune

"The new average life expectancy for Americans is 78.7 years".

Which of course fits roughly with the SS break-even point of payout amounts.
Thus, if you are a substance abuser you obviously should claim early, since you are bringing down the average life expectancy.
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