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Is the Bear Market Causing Anyone to Consider Taking SS Earlier Than They Planned?
Old 12-28-2018, 01:57 PM   #1
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Is the Bear Market Causing Anyone to Consider Taking SS Earlier Than They Planned?

Some folks have suggested delaying taking Social Security so in the event of a severe downturn in the market/economy, they can opt to start SS to avoid drawing down other investments when they are depressed in value. So is this bear market bad enough to get people to pull the trigger on SS?

I was considering starting SS in 2019 when I turn 68 anyway but I'm thinking it may be even more advisable in light of recent events. I'm curious what others are thinking. FYI, in the absence of SS, I will need to take IRA distributions next year although I'd probably take them from IRA cash and short term bond funds which have not experienced significant drops.
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Old 12-28-2018, 02:07 PM   #2
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That would be a hasty decision since the Bear Market is already over.

You do know that equities are up big-time in the past 3 days, right?

I'll also note that anyone in / near retirement age where they can actually file for SS should not be 100% equities, so whatever happened in 2018 should have had little effect on their finances and portfolio.
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Old 12-28-2018, 02:12 PM   #3
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Some folks have suggested delaying taking Social Security so in the event of a severe downturn in the market/economy, they can opt to start SS to avoid drawing down other investments when they are depressed in value. So is this bear market bad enough to get people to pull the trigger on SS?
Been there, did that in 2008. What's happening now pales in comparison and doesn't really come close to what I'd classify as a "severe downturn" - at least not yet.

Keep your powder (and SS) dry for now.
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Old 12-28-2018, 02:28 PM   #4
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> So is this bear market bad enough to get people to pull the trigger on SS?

For us, not by a mile.

We do think that in an extended downturn we would consider turning on SS "early." But to us an extended downturn means more than a year or so. We have a very high tilt in our AA toward stocks/stock MFs, but we maintain a cash buffer. This type of market is exactly why we keep the buffer and it helps us not have to liquidate assets when the market is lower.

Also, if measured from the peak, the market is down substantially. But I look at our assets and we have more than we had at every year-end except last year. Rationally speaking, we're still in great shape and far from needing to visit the local soup kitchen.
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Old 12-28-2018, 02:37 PM   #5
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While I plan to keep early SS as a backup plan, that is for an extended, substantial PORTFOLIO loss. My portfolio (at 56/44 AA) is only down about 4% from Jan 1. As folks said above, if a barely bear market in stocks forces early SS you either have too much equity exposure or maybe are not quite FI.

So no, this short, minor disturbance in the force is not making me consider early SS.
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Old 12-28-2018, 02:47 PM   #6
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We are not considering it but do know it is out there if we need it. We keep a few years expenses over and above one SS check and a pension, in cash. This is for times like these. We would have to weigh giving up the 8% or so yearly increase in SS vs whatever funds will bring in.
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Old 12-28-2018, 03:01 PM   #7
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That would be a hasty decision since the Bear Market is already over.

You do know that equities are up big-time in the past 3 days, right?

I'll also note that anyone in / near retirement age where they can actually file for SS should not be 100% equities, so whatever happened in 2018 should have had little effect on their finances and portfolio.
I'm not so sure as you are that the bear market is over. Market rallies in bear markets are common but the bear market winds up grinding lower. The average length of the last five bear markets is 20 months and the average eventual decline is 43%!

I would also argue that you don't have to be 100% equities to feel a lot of hurt in a bear market.
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Old 12-28-2018, 03:22 PM   #8
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Why not play it by ear? In other words, if you start shopping the dollar store for a good price on cat food (for dinner), then it might be time to claim your SS even if you had planned to wait.

Otherwise, if you find the idea of waiting to be appealing, I can tell you that waiting until 70 gives you such a delightfully big monthly deposit. The second Wednesday of every month has been a real thrill for me lately since I claimed SS last June at age 70.
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Old 12-28-2018, 03:43 PM   #9
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Not a Chance .... With 70% Bonds, I don't think I even saw a 5% decline in my portfolio at the low point this month....
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Old 12-28-2018, 03:43 PM   #10
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It's still theoretical for me as I am not old enough yet, but the current situation is no where near needing to take SS if i were eligible. it would take being bereft of cash, and not having the expectation that dividends and any cash generated by regular re-balancing to be enough to sustain me along with the pension.

So,it's as much a personal situation decision (lots of moving parts related to the particular year's spending needs) as it is part and parcel of a truly severe downturn, which this is not yet such.
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Old 12-28-2018, 03:45 PM   #11
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Not yet. I have at least 2 years worth of cash to tide me through a bad bear and that will get me to 68. At that point if the bear is still grinding lower, I might then think about it.
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Old 12-28-2018, 03:56 PM   #12
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It is an option but will probably not pull the trigger earlier than planned.

My claiming plan begins in May 2019, 1 year before FRA. Our filling plan calls on us to evaluate every few months beginning the May 2019 until age 67 and probably pull the trigger then.

After doing the math, spouse is not eligible for a survivors benefit due to a Civil Service pension.

While we have a number of years worth of cash and s/t treasury funds to draw on, we will consider the market and the lack of a survivors benefit together in making the final decision.
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Old 12-28-2018, 04:02 PM   #13
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Not now, or until the ACA subsidies are not needed. I turn 62 early next year, so I'd be able to; it doesn't make sense to take a permanent pay cut? At least to me.

We have a year of taxed cash and some taxable assets. I couldn't afford the cap gains in 18, they won't be a problem in 19 . If we get desperate for some tax free assets we have a couple years expenses in two small Roths.

My plan, for SS, is to wait to my FRA, or 70. I'll make that decision later.
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Old 12-28-2018, 07:49 PM   #14
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Not us. We have enough in cash to draw on in down markets until my SS FRA. For retirement planning purposes we targeted SS for 63 at the earliest (a little more than 2 years from now), but based on our retirement spending so far we can delay that.
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Old 12-28-2018, 08:14 PM   #15
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That would be a hasty decision since the Bear Market is already over.

You do know that equities are up big-time in the past 3 days, right?

I'll also note that anyone in / near retirement age where they can actually file for SS should not be 100% equities, so whatever happened in 2018 should have had little effect on their finances and portfolio.
We donít know that the bear market is over yet.
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Old 12-28-2018, 08:24 PM   #16
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Been there, did that in 2008. What's happening now pales in comparison and doesn't really come close to what I'd classify as a "severe downturn" - at least not yet.

Keep your powder (and SS) dry for now.
+1 the recent drop is a baby bear, not anywhere significant enough to justify taking SS early. My YTD is only -4% or so. With my AA, I expect negative years every so often.
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Old 12-28-2018, 08:49 PM   #17
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I was already planning on taking it at 62 next year, but yes, the recent drop does make that decision a bit easier for me.
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Old 12-28-2018, 09:49 PM   #18
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Some folks have suggested delaying taking Social Security so in the event of a severe downturn in the market/economy, they can opt to start SS to avoid drawing down other investments when they are depressed in value. So is this bear market bad enough to get people to pull the trigger on SS? ...
This is not yet a severe downturn. If the market gets so bad and stays low for so long that my WR of 2.6% rises to higher than 4%, then I will consider starting SS.
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Old 12-28-2018, 11:24 PM   #19
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Like quite a few have posted, taking SS early is an option in my thinking--but only after a sustained downturn after I burn through more than 3 years of cash and to avoid selling stocks after a sustained long-term downturn of 3 years or more.

In 18 months my part-time gig for half my earlier salary will expire, and if the market is down 2-3 years after that, then I will consider it (that would be at 64-65). Right now I'm conserving a couple year's cash to avoid this, if possible. DW is 4.5 years younger, but being able to tap her IRAs in 4 years probably makes this option less likely.
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Old 12-28-2018, 11:42 PM   #20
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I have enough cash to last me 9 years. That's more than 7 biblical years of famine. And that does not count dividends from stocks.

Wait! At 9 years, I will be way past SS late claiming age, and past RMD on the IRA too.
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