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Old 03-16-2014, 06:29 AM   #41
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it should never be about what if i die, dead is dead. the real question should be what if i live?

to often folks make poor decisions because they look at things in terms of dying.
.
My personal view/situation is that if I make it to 83, I'll be thrilled! Really. Already had two close calls in the past 2 years and I'm only 61!

If my break-even on SS is 79 or so and I start 'losing' money at that point, I don't think I'll care; I'd rather have the extra money to spend now.

Obviously, the break-even doesn't mean the money stops, it just means I will be getting a bit less than had I taken it later. I can live with that as I enter my 80's. Plus it means that I had 17 years of NOT withdrawing that amount from my IRA so there should be some gains there to supplement.
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Old 03-16-2014, 06:36 AM   #42
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aaaah but you do have that extra money. what if i don't break even is old school thinking.

today i look at it as we can take far more in withdrawals early on at 62 then we would otherwise since if we wait we can refill our buckets from the higher out of pocket spending later on.

knowing we will get 78% more if we live to 70 will have us spending more now while we can enjoy it. it is liike a longevity annuity kicking in.

that extra dough for a life time will act as longevity insurance if we live that long. if not, then we spent even more in the early years than had we taken ss early on.

also you don't have to plan as far out with that big ss payment and colas kicking in for a lifetime .plan only to 85 instead of 95 and you can spend alot more today as well .

it is all a matter of flipping things and re-thinking about what is best for living and not dying. you will find there is a lot you can do now while waiting to collect than you had in your equation of just waiting.
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Old 03-16-2014, 08:12 AM   #43
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^^^^ I see your point here. But this still brings me back to the (unanswerable) question I have that lead me to find this forum many years ago:

What is the risk that the rules will change and my benefits will be diminished between my 62nd year (7 years from now) and my 70th year?
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Old 03-16-2014, 08:14 AM   #44
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so far so good is the only answer.
but common sense says unless they want everyone to take it as early as they can and drain the system they would never screw with the deferral amount.

that would be like losing your virginity. you get one shot and the deed is done forever. no one would trust this system and delayed credits and trust are what the system is based on.
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Old 03-16-2014, 08:55 AM   #45
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Mathjak, an excellent point that I hadn't considered....

LRDave: my concern as well... they might change the rules
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Old 03-16-2014, 08:57 AM   #46
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...What is the risk that the rules will change and my benefits will be diminished between my 62nd year (7 years from now) and my 70th year?
I don't think you can point to anywhere changes have been made to near-retirees in the past and the political implications are daunting enough that such changes are extremely unlikely IMO.
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Old 03-16-2014, 11:14 AM   #47
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^^^^ I see your point here. But this still brings me back to the (unanswerable) question I have that lead me to find this forum many years ago:

What is the risk that the rules will change and my benefits will be diminished between my 62nd year (7 years from now) and my 70th year?
I've thought about that, too. The most likely change is some sort of means testing based on non-SS assets or income. I figure that if I defer SS, I will arrive at 70 with fewer assets and less non-SS income than I would have had if I had started at 62. This makes it less likely that I'll get caught by some future means testing rule.

Of course, "most likely" is based on my reading of political tea leaves. I can't claim any special abilities on that.
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Old 03-16-2014, 01:24 PM   #48
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but common sense says unless they want everyone to take it as early as they can and drain the system
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As they claim it to be "actuarially neutral", is it possible to drain the system in one case and not the other? (serious question...I"m no mathematician)
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Old 03-16-2014, 03:04 PM   #49
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No. No matter how many times "actuarially neutral" is brought up, people still persist on refusing to realize what that means. Kinda depressing, really, to see people who know about the concept of "time value of money" seem to forget that when the subject of Social Security comes up.

What's even more interesting is the study about it done at the behest of the SSA. The paper that said the take-early benefits were tilted[*] in favor of high-income earners and away from low-income earners. I'd guess that most people who frequent boards like this are in the former category. If that's the case, then we are the people who most benefit from taking SS early.[*] Not a huge tilt, but discernable.


And if it was the case that delaying is financially beneficial to the recipient, then it is a detriment to the SSA fund. So it would be people who delay that are draining the system. Early claimers would be a lower drain on the system.
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Old 03-16-2014, 03:12 PM   #50
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I would think if 70 million baby boomers all wanted their benefits this year that would be a huge drain .
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Old 03-16-2014, 04:15 PM   #51
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What's even more interesting is the study about it done at the behest of the SSA. The paper that said the take-early benefits were tilted[*] in favor of high-income earners and away from low-income earners. I'd guess that most people who frequent boards like this are in the former category. If that's the case, then we are the people who most benefit from taking SS early.[*] Not a huge tilt, but discernable.
Interesting!

Here's the thing: the default response to many threads here is:
1) check out what FIRECALC says
2) did you check out FIRECALC?
3) I'd see what FIRECALC says

Well, I DID run my numbers through FIRECALC and a few others and, in my own personal case (high income earner), taking SS at 62 or 70 barely moved the needle.
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Old 03-16-2014, 08:37 PM   #52
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What's even more interesting is the study about it done at the behest of the SSA. The paper that said the take-early benefits were tilted[*] in favor of high-income earners and away from low-income earners. I'd guess that most people who frequent boards like this are in the former category. If that's the case, then we are the people who most benefit from taking SS early.[*] Not a huge tilt, but discernable.
Since high income people tend to live longer, I would have guessed the opposite.

But, SS is complicated. It may have something to do with spousal benefits.

Do you have a link?
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Old 03-17-2014, 04:35 AM   #53
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Interesting!

Here's the thing: the default response to many threads here is:
1) check out what FIRECALC says
2) did you check out FIRECALC?
3) I'd see what FIRECALC says

Well, I DID run my numbers through FIRECALC and a few others and, in my own personal case (high income earner), taking SS at 62 or 70 barely moved the needle.
it comes up the same because it does not consider the aspects i mentioned .

while the amounts overall do not change much the spending pattern can.

the higher ss lets you front load your spending and not have to keep as much powder dry.

also it does not take into consideration you can take a far larger swr early on and refill later in life.

it is no different than how you may shift your spending if you had longevity insurance kicking in if you lived that long.
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Old 03-17-2014, 05:48 AM   #54
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Interesting!

Here's the thing: the default response to many threads here is:
1) check out what FIRECALC says
2) did you check out FIRECALC?
3) I'd see what FIRECALC says

Well, I DID run my numbers through FIRECALC and a few others and, in my own personal case (high income earner), taking SS at 62 or 70 barely moved the needle.
Without disclosing what ending age you used or the relative size of SS compared to your other income sources, that doesn't tell us much. If you somehow chose something close to the breakeven age for 62 vs 70 and/or your portfolio/other income dwarfs SS - the needle wouldn't move much. That's why it's good for each of us to run our own numbers through FIRECALC.
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Old 03-17-2014, 06:17 AM   #55
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it comes up the same because it does not consider the aspects i mentioned .

while the amounts overall do not change much the spending pattern can.

the higher ss lets you front load your spending and not have to keep as much powder dry.

also it does not take into consideration you can take a far larger swr early on and refill later in life.

it is no different than how you may shift your spending if you had longevity insurance kicking in if you lived that long.
A good and interesting perspective! But how does one calculate the "far larger swr early on" number?
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Old 03-17-2014, 06:43 AM   #56
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Interesting!

Here's the thing: the default response to many threads here is:
1) check out what FIRECALC says
2) did you check out FIRECALC?
3) I'd see what FIRECALC says

Well, I DID run my numbers through FIRECALC and a few others and, in my own personal case (high income earner), taking SS at 62 or 70 barely moved the needle.
Correct. For most folks it will make little difference whether SS is taken at 62, 66 or 70 if the situation is handled prudently and investment results are typical.
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Old 03-17-2014, 09:35 AM   #57
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I don't think you can point to anywhere changes have been made to near-retirees in the past and the political implications are daunting enough that such changes are extremely unlikely IMO.
Well I think the Detroit pension situation is showing what could occur to the Social Security plan, and high unemployment presently of those under age 25 of 14 percent as officially acknowledged could pressure the system in the future, as those individuals become a larger portion of the voter block. Particularly concerning should be the clawback of "excessive earnings and annuities".

Detroit attorney says pension cuts actually close to 50 percent - World Socialist Web Site

What I am confident is the landscape will change as the next 10-20 years passes and I do not expect the present 20-30 year olds to be too worried about keeping social security intact, as is, for baby boomers who counted on it with the present rules. Especially for high income individuals with substantial retirement assets.

While I am convinced the benefits of waiting to age 70 for social security is correct in the right circumstances and especially for the high wage earner of a couple, there are so many factors that this ends up being a highly individual decision and the determination of whether it was the right or wrong decision can't be know until it is too late (age 75-80) to do anything about it. This I suppose is the risk of retirement decisions.
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Old 03-17-2014, 09:37 AM   #58
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while in theory anything can be made equal the reality is most americans stink at investing on their own.

not only do retirees tend to get more conservative as they age (which may be the wrong thing to do ) but most have neither the pucker factor or knowledge to invest on their own.

they would be taking a low risk return and trading it for a much more volatile return and they tend not to stick with that,
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Old 03-17-2014, 11:17 AM   #59
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Correct. For most folks it will make little difference whether SS is taken at 62, 66 or 70 if the situation is handled prudently and investment results are typical.
Yeah, that's what "actuarially neutral" means.

The difference between taking at 62 vs. 66. vs. 70 is the shape of the curve of income stream, not the monetary valuation of that stream. That's why the concept of NPV was invented, so we could compare different income streams.

The whole debate is about personal preference on the shape of the SS income stream. Some people prefer less for earlier (and more years) and some prefer more for later (and fewer years). But de gustibus non disputandum est.

All of which presupposes that the deal doesn't change as time goes by -- which I think is a very optimistic assumption.
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Old 03-17-2014, 12:36 PM   #60
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Yeah, that's what "actuarially neutral" means.

The difference between taking at 62 vs. 66. vs. 70 is the shape of the curve of income stream, not the monetary valuation of that stream. That's why the concept of NPV was invented, so we could compare different income streams.

The whole debate is about personal preference on the shape of the SS income stream. Some people prefer less for earlier (and more years) and some prefer more for later (and fewer years). But de gustibus non disputandum est.

All of which presupposes that the deal doesn't change as time goes by -- which I think is a very optimistic assumption.
Keep in mind that this approach is not "one size fits all". I my case, I am currently collecting SS benefits on my LW's account and, therefore, the wait 'till 70 comes out way ahead.
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