Is the Bear Market Causing Anyone to Consider Taking SS Earlier Than They Planned?

[daylatedollarshort]

Why would that be a goal? I can understand wanting to max out your inheritance if you think you have a shorter than average lifespan, but just to "get something out of it"? I have this picture of someone who took SS at 62 on their deathbed at a month before age 70, smiling and with their last breath saying "I beat them!"

It is not my goal but I it does seem to be a factor for some people who think of it more as a return of the money they paid in SS taxes.

 

[almost there]

As some transform SS into an "entitlement" like welfare rather than a personal retirement investment. The view may get skewed.

 

[Cut-Throat]

As some transform SS into an "entitlement" like welfare rather than a personal retirement investment. The view may get skewed.

You got it backwards.. Welfare is not an 'entitlement'.... You are entitled to Social Security, not so with Welfare..... The Politics are trying to change the meaning of the words.... It seems to be working.

 

[street]

^ agree, not Welfare at all.

 

[almost there]

Trust fund....... sorry.......And yes. It does seem to be working.
Started out as a Trust fund.......

http://federalsafetynet.com/entitlement-programs.html

 

[street]

^ true

 

[Cut-Throat]

Trust fund....... sorry.......And yes. It does seem to be working.
Started out as a Trust fund.......

Entitlement Programs - Federal Safety Net

Well, I certainly would not trust the website that you linked to... It seems to be run by an individual that wants to 'Change' the Benefits.... Change usually means Cuts... He has combined Social Security and Medicare (Entitlements) with Welfare and Medicaid (Not Entitlements) --- He goes on to say that SS and Medicare are Contributory and the others are non Contributory - Pure Political Garbage...... Please link to a Government Website for accurate information.


Here is information on this particular website - Which I would not trust in the least.



"The purpose of this website is to aggregate and summarize pertinent information on U.S.poverty and the welfare programs of the federal government. The website is generated and run by Bob Pfeiffer, a CPA and entrepreneur who became frustrated as he tried to understand poverty in the U,S. and the federal programs, their cost and effectiveness. The goal of the website is to educate the public and push for meaningful change. "

 

[almost there]

https://www.ssa.gov/oact/progdata/fundFAQ.html

"Millions of Americans believe (falsely) that their payroll taxes have been segregated to pay for their benefits and that, therefore, they "earned" these benefits. To reduce them would be to take something that is rightfully theirs. Indeed, Roosevelt -- believing he had created a contributory program -- said exactly that:

"We put those payroll contributions there so as to give the contributors a legal, moral and political right to collect their pensions. ... No damn politician can ever scrap my Social Security program."

What we have is a vast welfare program grafted onto the rhetoric and psychology of a contributory pension. The result is entitlement"

 

[Cut-Throat]

https://www.ssa.gov/oact/progdata/fundFAQ.html

"Millions of Americans believe (falsely) that their payroll taxes have been segregated to pay for their benefits and that, therefore, they "earned" these benefits. To reduce them would be to take something that is rightfully theirs. Indeed, Roosevelt -- believing he had created a contributory program -- said exactly that:

"We put those payroll contributions there so as to give the contributors a legal, moral and political right to collect their pensions. ... No damn politician can ever scrap my Social Security program."

What we have is a vast welfare program grafted onto the rhetoric and psychology of a contributory pension. The result is entitlement"

This statement is not in your link and is another 'Political Diatribe' .... Rubbish - This statement is written by Robert Samuelson, a very Conservative Leaning Columnist.... I can't understand why you quoted him.

 

[jazz4cash]

https://www.ssa.gov/oact/progdata/fundFAQ.html

"Millions of Americans believe (falsely) that their payroll taxes have been segregated to pay for their benefits and that, therefore, they "earned" these benefits. To reduce them would be to take something that is rightfully theirs. Indeed, Roosevelt -- believing he had created a contributory program -- said exactly that:

"We put those payroll contributions there so as to give the contributors a legal, moral and political right to collect their pensions. ... No damn politician can ever scrap my Social Security program."

What we have is a vast welfare program grafted onto the rhetoric and psychology of a contributory pension. The result is entitlement"

I have to agree with Cut-Throat. The way you posted this is mis-leading. I'm not saying that was your intention, but it's still not clear what connection you wanted to make by placing the link and the quote in the same post.

 

[jazz4cash]

OTOH, the ‘start at 62’ group has the option to change their mind anytime in the next 8 years if their situation changes or they see a better way.

I think you mean the "don't start at 62" group. That's a great point and exactly how I see it. It's not 62 or FRA or 70. I am 62 now and planning to go year by year (month by month, actually) upto but not exceeding FRA. Knowing that I could start at any time is a great plan B, as the subject of this thread implies. We just haven't seen anywhere near enough market decline to resort to plan B IMO.

 

[USGrant1962]

Um, they are all entitlements. In government programs, entitlement means a benefit you are entitled to under the law. SS, Medicare, Medicaid, SNAP, Unemployment, TANF, and CHIP are all entitlements. They are all considered "mandatory" spending in that annual appropriations bills cannot change them. Whether something is an entitlement has nothing to do with how it is funded.

 

[Cut-Throat]

Um, they are all entitlements. In government programs, entitlement means a benefit you are entitled to under the law. SS, Medicare, Medicaid, SNAP, Unemployment, TANF, and CHIP are all entitlements. They are all considered "mandatory" spending in that annual appropriations bills cannot change them. Whether something is an entitlement has nothing to do with how it is funded.

I disagree, and so do many sources such as this one.
https://www.thebalance.com/welfare-programs-definition-and-list-3305759


"Welfare programs are not entitlement programs. Those base eligibility upon prior contributions from payroll taxes."


"The four major U.S. entitlement programs in the United States are Social Security, Medicare, unemployment insurance, and worker’s compensation. Instead, welfare programs are based on a family's income. To qualify, their income must be below an income based on the federal poverty level."

 

[HFWR]

I started at 62, two years ago, so moot point. I realize starting later might have been more advantageous, but my BS bucket was full, the numbers worked in Firecalc, and, really, cat food ain’t so bad...

 

[joeea]

If I leave my spouse that dependent on that amount of money between 62 or 70 then I have done something very wrong already.

"that dependent" is your term. I used the word "prefer".

 

[pb4uski]

This statement is not in your link and is another 'Political Diatribe' .... Rubbish - This statement is written by Robert Samuelson, a very Conservative Leaning Columnist.... I can't understand why you quoted him.

Especially since some of what the author says is dead wrong

 

[Cut-Throat]

Especially since some of what the author says is dead wrong

+1

 

[HI Bill]

Let's say you have enough to live on at 62 or 67, and are still in good health. And that taking SS at 67 would give you an extra $21k in annual income (before taxes), or at age 67, $30k in extra annual income. You don't need it, but you could certainly use it for travel. Once you've reached the FRA, your spouse qualifies for maximum spousal benefits. Why not take it then, given the chances that you 1) won't live to 100, or even 90; 2) SS benefits could be reduced in the future; and most importantly, 3) you may not have the health, stamina, or desire to travel or need the extra money after 70 to 75?

If you're leaning towards a lean retirement, taking SS at 62 might also allow one to have many fewer years to bridge the spending gap between 4% SWR and the cash infusion from SS. Some don't have any heirs to leave assets to, and some want to maximize this. Everyone's situation is a little different.

Taking SS early allows you to keep your retirent accounts invested longer (which may help with longevity and long term care risks), and still spend more money in travel, dining out/toys. Whether this makes any sense depends on your assets, allocation, etc.

It's not always about how to maximize benefits. For some, it's about how to maximize the quality of your life while you have the will and health to spend. After my mom turned 79, she stopped driving, did minimal shopping, and her spending plummeted. She was banking money every month with a very modest income.

 

[almost there]

No, everyone is dead wrong. Unless you wait till 70. lol lol
That makes you a genius.

 

[street]

Let's say you have enough to live on at 62 or 67, and are still in good health. And that taking SS at 67 would give you an extra $21k in annual income (before taxes), or at age 67, $30k in extra annual income. You don't need it, but you could certainly use it for travel. Once you've reached the FRA, your spouse qualifies for maximum spousal benefits. Why not take it then, given the chances that you 1) won't live to 100, or even 90; 2) SS benefits could be reduced in the future; and most importantly, 3) you may not have the health, stamina, or desire to travel or need the extra money after 70 to 75?

If you're leaning towards a lean retirement, taking SS at 62 might also allow one to have many fewer years to bridge the spending gap between 4% SWR and the cash infusion from SS. Some don't have any heirs to leave assets to, and some want to maximize this. Everyone's situation is a little different.

Taking SS early allows you to keep your retirent accounts invested longer (which may help with longevity and long term care risks), and still spend more money in travel, dining out/toys. Whether this makes any sense depends on your assets, allocation, etc.

It's not always about how to maximize benefits. For some, it's about how to maximize the quality of your life while you have the will and health to spend. After my mom turned 79, she stopped driving, did minimal shopping, and her spending plummeted. She was banking money every month with a very modest income.

I really like the way you think and some good common sense. I also see what others want from SS so I know there really isn't a right or wrong but what each wants to do. Thanks

 

[Cut-Throat]

Let's say you have enough to live on at 62 or 67, and are still in good health. And that taking SS at 67 would give you an extra $21k in annual income (before taxes), or at age 67, $30k in extra annual income. You don't need it, but you could certainly use it for travel. Once you've reached the FRA, your spouse qualifies for maximum spousal benefits. Why not take it then, given the chances that you 1) won't live to 100, or even 90; 2) SS benefits could be reduced in the future; and most importantly, 3) you may not have the health, stamina, or desire to travel or need the extra money after 70 to 75?

If you're leaning towards a lean retirement, taking SS at 62 might also allow one to have many fewer years to bridge the spending gap between 4% SWR and the cash infusion from SS. Some don't have any heirs to leave assets to, and some want to maximize this. Everyone's situation is a little different.

Taking SS early allows you to keep your retirent accounts invested longer (which may help with longevity and long term care risks), and still spend more money in travel, dining out/toys. Whether this makes any sense depends on your assets, allocation, etc.

It's not always about how to maximize benefits. For some, it's about how to maximize the quality of your life while you have the will and health to spend. After my mom turned 79, she stopped driving, did minimal shopping, and her spending plummeted. She was banking money every month with a very modest income.

You ask a lot of questions, and they have all been answered before on this forum.... So if you're interested in the answers. Just get out your calculator and follow the MATH along in this Post......


You have to do the MATH

 

[arch57]

Fidelity and SS

First I want to thank the FIRE community for all the thoughtful posts. Been retired since July 2015 at age 57 and this first bear market has made me do a bit more analysis. I had relied on FireCalc but based on info from this board I tried the Fidelity retirement tool this afternoon to model collecting SS for my DW and myself at 62, FRA(66.5) and 70. I'm 61 and DW is 60. After running the tool I get 3 different ages that maximize your SS benefits using the metric of "Assets at End" (i.e. how much we leave when we croak at 90).

Age 70 "wins" with $677K in a significantly below average market vs. $280K at 62

FRA "wins" with $1.9M in a below average market vs. $1.6M at 62 and $1.8M at 70

Age 62 "wins" with $5.4M in an average market vs. $5.2M at 70 and $5.3M at 65

I've been leaning towards 62 because my other modeling (which I guess was average returns) tended to agree with Fidelity. So depending on my optimism or pessimism I can talk myself into collecting at 3 different ages...so many choices.

Or like Dirty Harry said "Are you feeling lucky?"

 

[pb4uski]

.... It's not always about how to maximize benefits. For some, it's about how to maximize the quality of your life while you have the will and health to spend. After my mom turned 79, she stopped driving, did minimal shopping, and her spending plummeted. She was banking money every month with a very modest income.

I think in many cases it is a false premise that by taking early that you have more to spend while you have the will and health to spend.... especially on this forum where many people are very well funded. By deferring you are just using your money earlier... and buying a COLA adjusted annuity issued by Uncle Sam.... with an added benefit of reducing the tax torpedo. Money is fungible. Also, see post #82.

 

[Dtail]

First I want to thank the FIRE community for all the thoughtful posts. Been retired since July 2015 at age 57 and this first bear market has made me do a bit more analysis. I had relied on FireCalc but based on info from this board I tried the Fidelity retirement tool this afternoon to model collecting SS for my DW and myself at 62, FRA(66.5) and 70. I'm 61 and DW is 60. After running the tool I get 3 different ages that maximize your SS benefits using the metric of "Assets at End" (i.e. how much we leave when we croak at 90).

Age 70 "wins" with $677K in a significantly below average market vs. $280K at 62

FRA "wins" with $1.9M in a below average market vs. $1.6M at 62 and $1.8M at 70

Age 62 "wins" with $5.4M in an average market vs. $5.2M at 70 and $5.3M at 65

I've been leaning towards 62 because my other modeling (which I guess was average returns) tended to agree with Fidelity. So depending on my optimism or pessimism I can talk myself into collecting at 3 different ages...so many choices.

Or like Dirty Harry said "Are you feeling lucky?"

Keep in mind that Fidelity's average result implies that your success rate is 50%, which one typically would not accept as a Firecalc success rate.
Most folks here who use the Fido calculator use the Significantly Below module.
In the above module, my SS at 70 y.o. was also the best result.

 

[daylatedollarshort]

First I want to thank the FIRE community for all the thoughtful posts. Been retired since July 2015 at age 57 and this first bear market has made me do a bit more analysis. I had relied on FireCalc but based on info from this board I tried the Fidelity retirement tool this afternoon to model collecting SS for my DW and myself at 62, FRA(66.5) and 70. I'm 61 and DW is 60. After running the tool I get 3 different ages that maximize your SS benefits using the metric of "Assets at End" (i.e. how much we leave when we croak at 90).

Age 70 "wins" with $677K in a significantly below average market vs. $280K at 62

FRA "wins" with $1.9M in a below average market vs. $1.6M at 62 and $1.8M at 70

Age 62 "wins" with $5.4M in an average market vs. $5.2M at 70 and $5.3M at 65

I've been leaning towards 62 because my other modeling (which I guess was average returns) tended to agree with Fidelity. So depending on my optimism or pessimism I can talk myself into collecting at 3 different ages...so many choices.

Or like Dirty Harry said "Are you feeling lucky?"

The feeling lucky factor can apply to other factors as well. A 65-year-old couple has a 45 percent chance -- almost 50-50 -- that one of them will survive to age 90.