Forbes: 44 "secrets" about Social Security

[marko]

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.

 

[Independent]

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?

 

[mathjak107]

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.

 

[Midpack]

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.

 

[marko]

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?

 

[youbet]

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.

 

[Running_Man]

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.

 

[mathjak107]

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,

 

[rayvt]

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.

 

[Hermit]

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.

 

[rodi]

A few of these are interesting to me.

My stepmom never married my dad - because she was collecting spousal from her deceased husband's acct. (The were registered domestic partners instead.) My dad would have lost his surviving spouse part of my mom's pension. Getting married would have been a big hit to their income streams. They were in their 70's when they did the analysis NOT to get married.

The math was clear for us for my husband to take SS early - since we have minor age children. That's something I learned from THIS board - but the article reiterated it.

Lots of different scenarios to ponder.

 

[imoldernu]

Current article about the subject, with details and numbers.

12 Facts You Need to Know About Our Retirement Crisis as the Battle Over Social Security Is Far From Over