Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Clear article about when to take Social Security
Old 04-20-2019, 02:05 PM   #1
Full time employment: Posting here.
Markola's Avatar
 
Join Date: Nov 2013
Posts: 720
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
__________________

Markola is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-20-2019, 03:33 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 7,562
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.
__________________

RunningBum is offline   Reply With Quote
Old 04-20-2019, 03:57 PM   #3
Thinks s/he gets paid by the post
teejayevans's Avatar
 
Join Date: Sep 2006
Posts: 1,275
Quote:
Originally Posted by RunningBum View Post
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.
teejayevans is offline   Reply With Quote
Old 04-20-2019, 03:59 PM   #4
Moderator
Aerides's Avatar
 
Join Date: Nov 2015
Posts: 2,916
and we're off...
Aerides is offline   Reply With Quote
Old 04-20-2019, 04:10 PM   #5
Thinks s/he gets paid by the post
frayne's Avatar
 
Join Date: Oct 2002
Location: 19th Hole
Posts: 2,897
I'll take annuities for $500, Alex !
__________________
A totally unblemished life is only for saints.
frayne is offline   Reply With Quote
Old 04-20-2019, 04:19 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 7,562
Quote:
Originally Posted by Aerides View Post
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.
RunningBum is offline   Reply With Quote
Old 04-20-2019, 04:45 PM   #7
Recycles dryer sheets
SnowBound's Avatar
 
Join Date: Dec 2017
Location: Wayside (rural) NY
Posts: 119
Quote:
Originally Posted by Aerides View Post
and we're off...
SnowBound is offline   Reply With Quote
Old 04-20-2019, 05:13 PM   #8
Recycles dryer sheets
 
Join Date: May 2007
Posts: 387
Quote:
Originally Posted by RunningBum View Post
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.
Attached Images
File Type: png 5%.png (226.3 KB, 312 views)
homestead is online now   Reply With Quote
Old 04-20-2019, 05:38 PM   #9
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,227
Quote:
Originally Posted by homestead View Post
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?
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Old 04-20-2019, 05:42 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 7,000
Quote:
Originally Posted by Spanky View Post
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...
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is online now   Reply With Quote
Old 04-20-2019, 07:35 PM   #11
Thinks s/he gets paid by the post
Teacher Terry's Avatar
 
Join Date: Jun 2014
Posts: 3,356
No brainer for me as my job ended making 22k/year (part time) and 65 so took my 363/month due to WEP.
Teacher Terry is offline   Reply With Quote
Old 04-20-2019, 08:58 PM   #12
Thinks s/he gets paid by the post
VanWinkle's Avatar
 
Join Date: Oct 2017
Location: Brighton
Posts: 1,049
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.
__________________
Retired May 13th(Friday) 2016 at age 61.
VanWinkle is offline   Reply With Quote
Old 04-20-2019, 10:12 PM   #13
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,227
Quote:
Originally Posted by Sunset View Post
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.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Old 04-20-2019, 10:30 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 7,000
Quote:
Originally Posted by Spanky View Post
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.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is online now   Reply With Quote
Old 04-20-2019, 10:34 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 7,000
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.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is online now   Reply With Quote
Old 04-20-2019, 10:46 PM   #16
Thinks s/he gets paid by the post
 
Join Date: Apr 2005
Location: Midwest
Posts: 1,960
Quote:
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.
razztazz is online now   Reply With Quote
Old 04-20-2019, 10:48 PM   #17
Recycles dryer sheets
 
Join Date: Dec 2018
Location: Wheaton
Posts: 137
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.
rk911 is online now   Reply With Quote
Old 04-20-2019, 11:04 PM   #18
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,227
Quote:
Originally Posted by Sunset View Post
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.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Old 04-21-2019, 12:26 AM   #19
Thinks s/he gets paid by the post
robnplunder's Avatar
 
Join Date: Nov 2013
Location: Bay Area
Posts: 2,524
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.
__________________
Pura Vida
robnplunder is online now   Reply With Quote
Old 04-21-2019, 05:19 AM   #20
Thinks s/he gets paid by the post
 
Join Date: Mar 2015
Posts: 2,541
Quote:
Originally Posted by Sunset View Post
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.
__________________

__________________
Old enough to know better.
joeea is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
when should you take social security article veremchuka FIRE and Money 117 02-21-2011 05:04 PM
At what age will you take Social Security? retire@40 FIRE and Money 39 10-05-2006 12:58 PM
Too much income to take Social Security this year Elderdude FIRE and Money 7 10-02-2006 05:00 PM
Social Security-Take It Now Or Later? haha Other topics 22 10-08-2004 03:36 PM

» Quick Links

 
All times are GMT -6. The time now is 10:47 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.