Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
Old 09-05-2016, 05:50 PM   #121
Full time employment: Posting here.
 
Join Date: Nov 2009
Posts: 504
Quote:
Originally Posted by zinger1457 View Post
Not sure your situation is typical. It sounds like the numbers you came up with were based on paying no taxes on your SS income (between 62-70). I would think many on this board, probably the majority, will pay some tax on their SS income. In my case if I take SS at 62 it will also push be into a higher tax bracket and eliminate my ACA subsidy. My current plan is to wait until FRA.
I posted on this thread earlier (#44) that we retired at 58/57 and took SS @ 62. Also posted that we've paid little to no Federal taxes during that time, and do manipulate income for ACA subsidy (wife only, I am VA and do/did not qualify). We live off SS and taxable account dividends (taxable <1/3rd of investments) Occasionally draw taxable year end CGs distribution to replenish cash held in online savings account (otherwise reinvest, but this is not taxed Federally, and helps keep taxes off SS). No TIRA withdrawals. It's not easy to make this happen as I also consult part time and have put earned income into TIRAs.

Only have to put up with this nonsense for another 1.5 years when wife goes on Medicare. I turned 65 a month ago and went on Medicare. I had to carry non-subsidized ACA insurance, as VA does not clearly state they cover emergency care in non-VA facilities (crappy ACA insurance that cost me $550/mos). Anyway I look at it - We'll most likely be subject to taxes on up to 85% of SS when we start drawing off TIRAs for Roth conversions when wife turns 65 (and probably the rest of our lives as well). It's always been just a way for the Federal government to claw back your SS, and it pretty much affects everyone...

The money invested is the equivalent amount of SS - left in our IRA which is tax deferred. You could spend it from your taxable accounts, but I would have chosen to spend down our IRAs. Again, we like Joylush don't require SS to retire and looking at these scenarios from that perspective is not typical nor for everyone as I stated. Retirement is as individual as fingerprints and none are the same IMO.
__________________

__________________
fritz is offline  
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 09-05-2016, 06:06 PM   #122
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,119
Quote:
Originally Posted by Music Lover View Post
^^
I understand, but perhaps some people simply want to enjoy the extra money in their healthiest years when they are most likely able to make the best use of it??

For me, if I make it past the break even point for early CPP, I plan to celebrate that I beat the actuary calculated odds...


I don't get it. Assuming one has significant individual investments - How does taking or not taking SS at 62 prevent somebody from enjoying their money? If one takes SS at 62 one has 'extra' money from the SS check to spend. If one waits until 70 to take SS one can spend 'extra' money from personal investments before 70 since the SS check at 70 will be significantly larger.

No difference. Unless one can predict the future and knows well in advance which will be the better choice. But, in that case this person would probably already have riches beyond the dreams of avarice.


I don't think most of us find 'fault' with others who use SS differently. I imagine the majority of folks would agree that when to take SS is a very personal decision for an individual or couple.
__________________

__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline  
Old 09-05-2016, 06:21 PM   #123
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,201
Quote:
Originally Posted by Chuckanut View Post
I don't think most of us find 'fault' with others who use SS differently. I imagine the majority of folks would agree that when to take SS is a very personal decision for an individual or couple.
+1
I think the question has different answers for different people in different situations. Most of us here realize that, although sometimes that doesn't come across in the written word. The few who don't see that different situations call for different strategies, will figure it out eventually.
__________________
Always be yourself, express yourself, have faith in yourself; do not go out and look for a successful personality and duplicate it.

― B. Lee








W2R is online now  
Old 09-05-2016, 06:58 PM   #124
Thinks s/he gets paid by the post
Souschef's Avatar
 
Join Date: Dec 2015
Location: Santa Paula
Posts: 1,024
Quote:
Originally Posted by W2R View Post
+1
I think the question has different answers for different people in different situations. Most of us here realize that, although sometimes that doesn't come across in the written word. The few who don't see that different situations call for different strategies, will figure it out eventually.
I absolutely agree. My wife was brain injured at 55 and I had to keep wo*rking to have her medical expenses covered until she turned 65 and was eligible for Medicare.
__________________
Retired Jan 2009 Have not looked back.
AA 95%/0/5
WR 2% SI 2SS & 2 Pensions
Souschef is online now  
Old 09-06-2016, 03:28 AM   #125
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,280
Quote:
Originally Posted by W2R View Post
+1
I think the question has different answers for different people in different situations. Most of us here realize that, although sometimes that doesn't come across in the written word. The few who don't see that different situations call for different strategies, will figure it out eventually.
i never understood the waiting until 70 to spend more rhetoric . it is ridiculous to think anyone who delays until 70 waits to spend more .

most if not all who delay are spending either the same as they would at 70 up front or in fact more up front .

you just replace it later with a 69% bigger check .

in fact you can spend more day 1 delaying than taking ss early and investing because the ss has no sequence risk .

you do not have to keep as much dry powder with the bigger check from ss as you would investing so you can have a bigger draw early on , not less .
__________________
mathjak107 is online now  
Old 09-06-2016, 07:07 AM   #126
gone traveling
 
Join Date: Aug 2016
Location: Alexandria VA
Posts: 48
Few posters have done a math analysis of the costs of the extra TAXABLE 401K and IRA withdrawals that would be necessary to support their lifestyle from age 62-70 years old while they wait to collect Social Security. (You are paying the full tax rate to withdraw money from your 401K or IRA.)

OR:

The cost of pulling the money out of the savings and 401K, IRA during the years they are 62-70 if there is a bear stock market during that period. If you are collecting social security during that period you would not need to be taking as much money out during those bear market years and will have more money in your retirement accounts at age 70 going forward.
__________________
Forced to Retire is offline  
Old 09-06-2016, 07:09 AM   #127
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,280
But it works both ways . i rather increase the ss payment by a pretty healthy percentage by spending down the assets losing money or not growing
__________________
mathjak107 is online now  
Old 09-06-2016, 08:01 AM   #128
Thinks s/he gets paid by the post
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 4,672
Quote:
Originally Posted by Forced to Retire View Post
Few posters have done a math analysis of the costs of the extra TAXABLE 401K and IRA withdrawals that would be necessary to support their lifestyle from age 62-70 years old while they wait to collect Social Security. (You are paying the full tax rate to withdraw money from your 401K or IRA.)

OR:

The cost of pulling the money out of the savings and 401K, IRA during the years they are 62-70 if there is a bear stock market during that period. If you are collecting social security during that period you would not need to be taking as much money out during those bear market years and will have more money in your retirement accounts at age 70 going forward.
Do whatever you want. In general, there is no known right or wrong answer. For specific situations, one way or another may have a better chance for an individual or couple to get ahead.

But don't tell us what analysis people have or haven't done. You don't know.

I would think you have more immediate concerns right now, based on your other thread, but I guess that's your business.
__________________
RunningBum is offline  
Old 09-06-2016, 08:07 AM   #129
Thinks s/he gets paid by the post
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 4,672
Quote:
Originally Posted by mathjak107 View Post
But it works both ways . i rather increase the ss payment by a pretty healthy percentage by spending down the assets losing money or not growing
Right, if I think a bear market is coming, I'd rather be pulling money out of the market. That's selling high, a good thing.

Once it hits, and I think it's at or near the bottom, I would be likely to start taking SS at that point, to avoid selling low. It's not a 62 or 70 decision; I can decide at any time between then to start.

I'm not a market timer, but choosing when to take SS might be one time when I am.
__________________
RunningBum is offline  
Old 09-06-2016, 08:14 AM   #130
Thinks s/he gets paid by the post
ivinsfan's Avatar
 
Join Date: Feb 2007
Posts: 1,992
Quote:
Originally Posted by Forced to Retire View Post
Few posters have done a math analysis of the costs of the extra TAXABLE 401K and IRA withdrawals that would be necessary to support their lifestyle from age 62-70 years old while they wait to collect Social Security. (You are paying the full tax rate to withdraw money from your 401K or IRA.)

OR:

The cost of pulling the money out of the savings and 401K, IRA during the years they are 62-70 if there is a bear stock market during that period. If you are collecting social security during that period you would not need to be taking as much money out during those bear market years and will have more money in your retirement accounts at age 70 going forward.
Why don't you show us some figures on those 2 items? Use your own portfolio as the starting point.
__________________
ivinsfan is offline  
Old 09-06-2016, 08:28 AM   #131
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,288
Quote:
Originally Posted by Forced to Retire View Post
Few posters have done a math analysis of the costs of the extra TAXABLE 401K and IRA withdrawals that would be necessary to support their lifestyle from age 62-70 years old while they wait to collect Social Security. (You are paying the full tax rate to withdraw money from your 401K or IRA.)

OR:

The cost of pulling the money out of the savings and 401K, IRA during the years they are 62-70 if there is a bear stock market during that period. If you are collecting social security during that period you would not need to be taking as much money out during those bear market years and will have more money in your retirement accounts at age 70 going forward.
I might not be one of them but what I adore about the posters in this thread and in general on these boards is their ability to thoughtfully analyze in depth the ramifications of almost every financial decision one might make in their lives and all the variables involved, which has taught me so much. Just because their analyses might not support the decisions I make doesn't mean they aren't doing a "math analysis."
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline  
Old 09-06-2016, 08:53 AM   #132
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,565
Quote:
Originally Posted by Forced to Retire View Post
Few posters have done a math analysis of the costs of the extra TAXABLE 401K and IRA withdrawals that would be necessary to support their lifestyle from age 62-70 years old while they wait to collect Social Security. (You are paying the full tax rate to withdraw money from your 401K or IRA.)
I thought I provided my personal analysis within 20 minutes of your original post. (see post #4, third paragraph)

More broadly, I think that MOST posters in this forum have done the math analysis at some point; whether they care to share it is another matter.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is online now  
Old 09-06-2016, 09:04 AM   #133
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 2,045
My plan has always been to take SS at 62, simply because I don't fully trust the government. I figure the sooner I get on board, the sooner I get grandfathered in, and they won't screw with me as badly as they will the younger generations.

However, all that aside, I ran the numbers through FireCalc, and it seems irrelevant whether I take it at 62, 70, or anywhere in between. Now, this is for a single guy with no dependents who intends to be retired long before 62, so your outcome may vary if you have a spouse or other beneficiary on record. And I guess it could vary depending on your age. But in my case, when I decided to take SS never changed the success ratio by more than maybe 1%.

I guess that would make sense, too. Your SS benefit increases around 7-8% for every year you wait to collect. But, on average, the stock market goes up about 7-8% a year (just not consistently), so maybe that's what tends to make it a wash, at least using Firecalc's data?
__________________
Andre1969 is offline  
Old 09-06-2016, 09:14 AM   #134
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,692
Quote:
Originally Posted by samclem View Post
Folks who are modeling 7.5% or 5.2% real returns, or 3% for that matter, for a diversified portfolio in the near term (e.g. 8 years, the period affected by the "early or late SS decision") aren't viewing the investment world in the same way I am. Not that they are right or wrong. But it does impact the break-even point (which, again, is not an especially useful metric IMO).


But if one did expect something more like 1-2% real real returns for the next decade, followed by less predictable returns after that (e.g. possibly back to historical mean, or tanking for a period of a decade or more) . . . . the higher SS checks obtained by delayed SS claiming would be useful in the case of "tanking" and of no harm in the case of "portfolio growing to the sky."
Agreed.

I simply used the poster's return #s to make the point that any analysis should use real, risk-adjusted return #s for any comparison.

Following that line of thinking, the 20+/- year 'break-even' point that's often cited in SS delay/don't delay discussions is also very likely much shorter in today's low return environment. Here's some data from another Kitces post, which demonstrates that @ 4% inflation & 6% return, the break-even is just 15 yrs. One could extrapolate downward (shorter break even periods) from there for less optimistic scenarios.

Excerpt:
According, the graph below shows the original benefit delay (at 3% inflation and 8% growth), and an alternative scenario with 4% inflation and only 6% growth. In this case, it takes only 15 years to breakeven, instead of 20


https://www.kitces.com/blog/the-asym...ltimate-hedge/

Whether the 'break-even point' is a useful metric or not, I do get the strong sense that it plays a large role in the decisions people make regarding what age to start SS; they want to 'win' with their decision. So, I expect that a 10yr or 15 yr break-even point would pull a lot of folks into the "delay SS" camp.

Perhaps we should start a poll.
__________________
You may be whatever you resolve to be.
Huston55 is offline  
Old 09-06-2016, 09:29 AM   #135
gone traveling
 
Join Date: Aug 2016
Location: Alexandria VA
Posts: 48
Today's low return environment? What? The stock market has gone up three fold since 2009 and the bond market has done great too. (This low return everyone is talking about is fiction and meant to sell annuities and get people to click on links to sell advertising.

Quote:
Originally Posted by Huston55 View Post
Following that line of thinking, the 20+/- year 'break-even' point that's often cited in SS delay/don't delay discussions is also very likely much shorter in today's low return environment. Here's some data from another Kitces post, which demonstrates that @ 4% inflation & 6% return, the break-even is just 15 yrs. One could extrapolate downward (shorter break even periods) from there for less optimistic scenarios.
__________________
Forced to Retire is offline  
Old 09-06-2016, 09:37 AM   #136
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,119
Quote:
Originally Posted by Andre1969 View Post
My plan has always been to take SS at 62, simply because I don't fully trust the government. I figure the sooner I get on board, the sooner I get grandfathered in,
But, aren't you trusting the government to grandfather you in?

IMHO, you are placing a lot of trust in the government and your fellow citizens to allow early claimers to go on collecting their enriched booty, while the rest of us who waited get less. Personally, I would not place my trust there.

For example: The recent changes in filing a restricted application had an exception for people already above a certain age, whether you had already filed a restricted application or not.

Still, we each do what we think is best for us in our individual circumstances, and I won't try to tell anybody what they must do.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline  
Old 09-06-2016, 09:39 AM   #137
Full time employment: Posting here.
GravitySucks's Avatar
 
Join Date: Feb 2014
Location: Syracuse
Posts: 879
I've done the math considering taxes.... For Bull, Bear, and Neutral markets. As a single man it didn't make a huge difference.
My decision was to take at FRA unless my portfolios real value is higher than at retirement date, if that's the case postpone to 70. The reason is I believe SS has a better chance of being there when needed than my investments do. I can survive on SS 62, live decently on SS FRA, and live pretty well including a couple of trips a year on SS 70. The insurance consideration is more valuable than the few dollars difference the three options actually provided.
The kids are on board as they'd rather have a smaller inheritance than have me living in their basements.
If I'm wrong I'm wrong, doubt my last thoughts will be SS got the better of me.

All moot now as I found I will be eligible for a small survivor benefit at 60. I'd have to really screw the pooch on investments or find I have a fatal health condition to take it early now.

Anyone who thinks different is wrong! (Not really. YMMV.)
__________________
“No, not rich. I am a poor man with money, which is not the same thing"
GravitySucks is offline  
Old 09-06-2016, 09:40 AM   #138
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,591
Quote:
Originally Posted by Forced to Retire View Post
Today's low return environment? What? The stock market has gone up three fold since 2009 and the bond market has done great too.
What are CDs yielding today?
What are bond yields today?
What is the history of the US stock market when stock prices are at present levels relative to earnings? (For more info, Google "Schiller PE10" and scan some articles).
Here are two good ones to start with:
Kitces: CAPE's predictive value,long and short term.
ER-ORG thread: Future Returns

The consensus of those who have nothing to gain by selling people something is rather gloomy right now.

Would you expect stocks to do better for the 10 years after a large run up in prices (as we've seen since the 2009 crash), or would you expect them to do worse after such a run up?

Nobody has a crystal ball that gives precise answers about the future. But still there are useful indicators that can point to the likely range of future returns.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now  
Old 09-06-2016, 09:41 AM   #139
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Second City Land
Posts: 23,735
Quote:
Originally Posted by Forced to Retire View Post
Today's low return environment? What? The stock market has gone up three fold since 2009 and the bond market has done great too.
Everyone here understands that "low return environment" is a forward-looking term.
__________________
MichaelB is offline  
Old 09-06-2016, 10:05 AM   #140
Dryer sheet aficionado
 
Join Date: Jun 2014
Posts: 38
Quote:
Originally Posted by sengsational View Post
.... But I'm generally in the "cheap longevity insurance" camp, since I do plan to live forever
... and as Steven Wright would say about his plan to live forever, "So far, so good".
__________________

__________________
merlin3942 is offline  
Closed Thread


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
Wait until 35 to save! traineeinvestor FIRE and Money 50 09-27-2011 08:18 PM
wait until after 2012 elections to retire? palomalou FIRE and Money 12 05-23-2011 03:46 PM
I'm Irish, but could not wait until St. Pat's day mickeyd Other topics 4 07-09-2007 07:02 PM
Wait to Age 70 to Collect SS? REWahoo FIRE and Money 77 11-27-2005 02:49 AM
Buy I-bonds now or wait until Nov? soupcxan FIRE and Money 16 11-01-2004 11:57 AM

 

 
All times are GMT -6. The time now is 11:34 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.