If the opportunity arose, would you take SS @ 60?

[IMATERP]

As I previously mentioned, I will be collecting a State Pension in addition to Free Healthcare (via our State's health plan @ age 60.). Over and above this, I have an IRA, 401k, paid off house, etc.

My question has to do with the defined pension benefit. There are 2 options to choose from:

1. Take a flat monthly amount at age 60 - say $1,500 for the rest of my life (+ cola,) or

2. Take an adjusted higher amount that pays me the equivalent of SS + pension for two years and then the pension is reduced it at age 62 so that my monthly payment is blended so that I receive the same amount (+ cola) for the rest of my life.

In essence, the State is giving me the option of collecting an additional amount from 60 - 62 until SS kicks in.


Option 2 covers all of my budgeted costs (with ease) and I could use income from another source for travel and or emergencies. I also smoked for 30 years so my life expectancy should be a little less than the norm.

Lastly, I wouldn't even consider the option if I opted to get involved in some lucrative "side hustle," where I saw that I would create additional taxable income.

Michael

 

[Walt34]

2. Take an adjusted higher amount that pays me the equivalent of SS + pension for two years and then the pension is reduced it at age 62 so that my monthly payment is blended so that I receive the same amount (+ cola) for the rest of my life.

In essence, the State is giving me the option of collecting an additional amount from 60 - 62 until SS kicks in.

That's exactly what I did, only I retired at 52. But then a few years later I stumbled into a nearby low-stress job and stayed there until a bit after age 63 and just made up any needed difference from savings until 66 and started SS then. So the combined income now is more than we had planned on and that's always nice.

 

[97guns]

I will take it for whatever it is, as soon as I can get it, my mind does not debate over it.

 

[evilanne]

Are you planning to retire at 60 regardless of the option you choose? Are you planning to take SS at 62 or delay? Will the options impact when you take SS?

My only option as Federal Employee under FERS was #2, but I have to wait until my minimum retirement age for it to begin (56-62), but pension & supplement doesn't get any COLA; reduced COLA kicks in for pension after that. The 1st option is similar to a single life annuity which you could determine the net present value to compare the equivalent NPV of the amount you get for the 2 years. It really depends a lot on your life expectancy given your health and family history. Good luck.

 

[euro]

I will take it for whatever it is, as soon as I can get it, my mind does not debate over it.

I tend to agree with that philosophy

 

[Blue Collar Guy]

Take the money the second you can. thats my theory. thats exactly what in going to do.

 

[Danmar]

Take the money the second you can. thats my theory. thats exactly what in going to do.

Not me. Don't need the money, in very good health, not material in any event so will defer till 70.

 

[lucky penny]

<<Not me. Don't need the money, in very good health, not material in any event so will defer till 70.>>

I'm with Danmar. I view it as a deferred longevity annuity with a cola. If I die before the break-even point, well, last thing I'll worry about is not breaking even on SS. But if pass that point, I'll be happy I waited. I'm old enough that I trust (OK, hope) that if they change the rules, it won't affect me.

 

[Blue Collar Guy]

Not me. Don't need the money, in very good health, not material in any event so will defer till 70.

Thank you, i want to get my hands on the 226000 my employer and i put in before i get beat out of it.

 

[Blue Collar Guy]

<<Not me. Don't need the money, in very good health, not material in any event so will defer till 70.>>

I'm with Danmar. I view it as a deferred longevity annuity with a cola. If I die before the break-even point, well, last thing I'll worry about is not breaking even on SS. But if pass that point, I'll be happy I waited. I'm old enough that I trust (OK, hope) that if they change the rules, it won't affect me.

see above

 

[Danmar]

Thank you, i want to get my hands on the 226000 my employer and i put in before i get beat out of it.

Well to each their own of course. But since you don't actually need the money seems less than optimal to me. Why do you think you are going to get "beat out of it"?

 

[Meadbh]

I have the opportunity to take CPP at 60, albeit at a discounted rate. Or I can take it any time between 60 and 70. The money will be material to me, since I have no other pension. Since I did not spend my entire working life in this country, and because I ER'd at 55, I will not be entitled to the maximum CPP. Furthermore, the longer I wait, the more years without income will be included in the calculation. So I outruled waiting till 70. The decision therefore is which year between 60 and 65 is optimal. I consulted with a pension expert to do the precise calculations, and I have concluded that there is still a benefit to waiting till 65, because I can lock in a higher baseline prior to COLA. However, if CPP was crucial to my monthly cash flow, I would take it as soon as possible.

 

[travelover]

My pension plan gave a mandatory supplement from 54 to 62 and I just invested the excess. DW retired at 60 and had a choice to take the supplement. I advised her not to take the supplement to keep payments at a maximum for life.

 

[kcowan]

I consulted with a pension expert to do the precise calculations, and I have concluded that there is still a benefit to waiting till 65, because I can lock in a higher baseline prior to COLA. However, if CPP was crucial to my monthly cash flow, I would take it as soon as possible.

I did the same and concluded that 62 was the best choice. I wanted to leave my portfolio intact because I felt it would return more than I would lose from forgoing the CPP increase. I never considered the RRSP for the same reasons. The CPP enabled me to take higher risk in the portfolio. It turns out to have been the right decision.

 

[Music Lover]

I did the same and concluded that 62 was the best choice. I wanted to leave my portfolio intact because I felt it would return more than I would lose from forgoing the CPP increase. I never considered the RRSP for the same reasons. The CPP enabled me to take higher risk in the portfolio. It turns out to have been the right decision.

Probably CPP at 60 for me. I'm in the "take it while you can get it" camp, and am going with the assumption that I will probably enjoy the extra money more while I'm younger and more active. If I live beyond the break-even point, I'll be happy that I beat the odds but won't lose any sleep over what was left on the table...not that there will be a lot to leave on the table considering how little CPP actually pays.

 

[Fedup]

No, I'm in the process of converting tIRA to Roth. Therefore I need to minimize my income so I can convert more. I have a tiny pension comes in at 62 and I've been debating whether to take it. It is so small that I think I might delay it. I've read I will get a bonus check for the time not taken, so that's what I might do. Still debating ether to take SS at FRA or 70.

 

[Mdlerth]

I am extremely married to a woman who has only 19 years of SS contributions in the calculation. My non-COLA pension's survivor benefit is forecast to be squat by the time I expire. I expect to defer my SS until 70 to preserve the highest benefit for DW when I'm dirt napping.

 

[audreyh1]

Not me. Don't need the money, in very good health, not material in any event so will defer till 70.

Same here. It just raises our taxes. It will help pay for Medicare, after taxes that's about it. Since I don't get Medicare until 65, no reason to take it sooner. But will probably still wait until 70.

 

[Blue Collar Guy]

Well to each their own of course. But since you don't actually need the money seems less than optimal to me. Why do you think you are going to get "beat out of it"?

im unlucky,
I think some how i will not get what was promised to me when i was forced to pay into this program. Im either gonna die young, or they will make me the poster boy of why i should receive less than was promised,i.e. house worth too much, too much savings, pension too high, etc. Ill cry that i saved my dough 1 dollar at a time and didnt drive a new car till i was 42, or i lived in a small apt for 17 years.(prior to that i lived in a big apt) . Or going on vacation was taking the family to the Smithsonian, not a European vacation. Anyway thats my view of the issue. Id like to say i value your view point and appreciate the other side of the coin.

 

[jazz4cash]

I am extremely married to a woman......

That's a curious expression....what is the meaning?

 

[Mdlerth]

That's a curious expression....what is the meaning?

It's just part of a lighthearted schtick I maintain in all references to my state of nuptial ecstasy. It reassures DW that I only have eyes for her.

 

[jazz4cash]

I get it. Kinda like my response when asked how long we've been married I say a hundred years.