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Old 05-26-2013, 05:00 PM   #21
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While I understand your concern of the whole 'potential legislation thing', two aspects to keep in mind are that

1) Any changes regarding means-testing would likely hit ALL retirees, not just those retirees that haven't started taking SS yet (after all, I'm sure the masses would want to know why someone taking SS with a $250k income should be spared, while someone who hasn't started collecting SS yet and would have a $100k income plus SS should get whacked).

2) More importantly, how long does it take to start receiving SS? If the winds in Washington are starting to blow a certain direction, could you simply run down to the SS office and file immediately? Any legislation usually takes a few weeks to wind its way through committees, floor votes, then go to the other Congressional body for the same thing. It could be retro-active to the beginning of the year, but combining this with #1, given current SS distributions, I personally would take the chance and let SS accumulate until maybe 68-70 (assuming decent health) if my portfolio at that time isn't close to a marginal survivability...although I'm projecting a lifespan to age 81 or so given family history (and I believe 81-82 is the current approximate break-even for SS for men for delaying to 70 vs FRA), so I might end up taking it at FRA - which in 31 years, could very well end up being 70!
Good points, and considering that my port is primarily before tax $s, the waiting to 70 may make sense to reduce RMDs $s, but on the other hand family longevity is a mixed bag and may not be on my side.
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Old 05-26-2013, 05:17 PM   #22
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Annoying how the article uses "when to retire" and "when to start taking SS" as if its the same thing. As if its not even possible to pay your own way for a few years.
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Old 05-26-2013, 05:43 PM   #23
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For god's sake, have a glass of wine or your favorite adult beverage. If it happens, then you can stew.
I do like your idea about having an adult beverage.
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Old 05-26-2013, 07:04 PM   #24
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I don't understand the idea of making a decision that you wouldn't otherwise make on SS because you don't trust the government not to change it. It would seem to me you could at least wait until such a proposal was being seriously discussed and had a decent chance to pass congress and get a presidential signature.
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Old 05-26-2013, 08:05 PM   #25
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I don't understand the idea of making a decision that you wouldn't otherwise make on SS because you don't trust the government not to change it. It would seem to me you could at least wait until such a proposal was being seriously discussed and had a decent chance to pass congress and get a presidential signature.
Let's say you are 62 now and have a chance to collect $1000/month. You decide to wait until 70 when you can get $1800/month. (Suggest more reasonable numbers if these are off.)

8 years from now, the government decides it will cut SS payments in half. Perhaps it's due to means testing and in your case it will be half. So now you are getting $900 month. It's more than the $500/month you'd be getting if you started at 62, but you had 8 years of $1000/month. That moves the break even point a few more years out, doesn't it?

Waiting until something happens may be too late. Hopefully they won't make changes effective for people already eligible for benefits, but it's possible they will. It's also possible they would make them effective on anyone not yet collecting, even if you are eligible, but that seems unlikely.
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Old 05-26-2013, 08:20 PM   #26
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True, and as I typed it I realized there's an opportunity cost if they change it suddenly and you missed the opportunity to be collecting earlier. But given there are no voices in power that talk about changing the deal for anyone within 10 years of full retirement age, it seems paranoid to change your decision based on the mere possibility.
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Old 05-26-2013, 09:35 PM   #27
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True, and as I typed it I realized there's an opportunity cost if they change it suddenly and you missed the opportunity to be collecting earlier. But given there are no voices in power that talk about changing the deal for anyone within 10 years of full retirement age, it seems paranoid to change your decision based on the mere possibility.
The Social Security website (ssa.gov) states the following "Your estimated benefits are based on current law. The law governing benefit amounts may change because, by 2033, the payroll taxes collected will be enough to pay only about 75 cents for each dollar of scheduled benefits."

This estimate is based on the economy and employment growing "normally" It stands to reason that if growth is lacking then the 2033 date may be moved forward. 2033 is 20 years from now. If the date were to be moved forward (due to lack of growth in the economy and employment) it's is certainly not paranoid to think that a decade from now if things look iffy there may be a substantial reduction in benefits. To use up one's own resources betting on the assumption that everything will be just peachy with government finances sounds a bit optimistic to me.

And let's not get started with the dysfunctional political critters at the moment.
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Old 05-26-2013, 10:02 PM   #28
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I don't think I have to decide right now. DH took at 62 1/2 (since we had 2 minor children at the time it was unquestionably the right call for him since it allowed them to get benefits).

I am currently seriously considering taking a spousal benefit at 66 (my FRA) while letting mine to grow until 70.

DH and I have similar sized benefits on our own records with mine slightly higher than his.

However, I will look at it in a few years when I turn 62 and will continue to look at it periodically after that.

I am not worried about SS changes occurring that would apply only to people who haven't taken benefits. I don't think that will happen. I think any changes will likely be age or income based.

I am worried some about reductions in the amount of future benefits whereby it would have been better to start collecting at 62 to get in some higher benefits before changes kick in. However, I figure I don't really have to think much about it until I am 62 and will assess it all then.
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Old 05-27-2013, 12:36 AM   #29
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I guess I am in a minority. I don't see others posting that are in my situation. I plan to take SS on my late DW's account when I retire in the next month or so. Using her account shifts the calculations to favor waiting until 70 for my SS. Between her SS and my pension, my living expenses should be close to covered. When I turn 70, with RMD and max SS, I will be in a high tax bracket, but, like others have said, it beats the alternative of not collecting enough to be taxed!
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Old 05-27-2013, 01:06 PM   #30
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When I jumped on the SS train in the 60's I just assumed that it would not be there for me @65 as there were a bunch of crazy long-term projections that did not make sense. Fast-forward to current time, and you will see me taking my monthly distribution on my spousal account at the SS trough and letting my (much larger) SS (DRC) account grow @ 8% for a couple more years at which time DW and I will then jump over to my account and begin taping it for a much larger slice of the monthly pie.

Subject talks about "joining the other 1%"~ is that me?
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Old 05-27-2013, 01:24 PM   #31
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This guy didn't retire until 85, wonder when he started SS.
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Old 05-27-2013, 01:40 PM   #32
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I started SS January of the year after my 62nd birthday - I didn't want the extra income the year before for tax reasons. I like the income stream since I don't have a pension of any sort, just investments. I'm single so there's no spousal SS to collect on. I don't regret what I did, and would do it again today.
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Old 05-27-2013, 03:00 PM   #33
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8 years from now, the government decides it will cut SS payments in half. Perhaps it's due to means testing and in your case it will be half. So now you are getting $900 month. It's more than the $500/month you'd be getting if you started at 62, but you had 8 years of $1000/month. That moves the break even point a few more years out, doesn't it?
.
Well, if we're doing hypothetical whacky government changes, perhaps they've also thrown in a clawback clause, and now you have to pay back the 'extra' $500/month you got for eight years. (If the federal government can do this to state governments, I see no reason it can't be done to individuals as well...) Maybe an encumbrance on your property?

Realistically, does anyone have to worry about cuts to current SS recipients? You know, old people, the ones with the highest voter turnout of any age bracket? And the AARP lobby? Does any Congresscritter really want to face a stampede of tennis-ball tipped walkers, and the threat of being gummed to death by the angry toothless hordes?
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Old 05-27-2013, 07:17 PM   #34
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Well, if we're doing hypothetical whacky government changes, perhaps they've also thrown in a clawback clause, and now you have to pay back the 'extra' $500/month you got for eight years. (If the federal government can do this to state governments, I see no reason it can't be done to individuals as well...) Maybe an encumbrance on your property?

Realistically, does anyone have to worry about cuts to current SS recipients? You know, old people, the ones with the highest voter turnout of any age bracket? And the AARP lobby? Does any Congresscritter really want to face a stampede of tennis-ball tipped walkers, and the threat of being gummed to death by the angry toothless hordes?
I agree any changes to SS benefits for current retirees are likely to be modest in scope. For example making 100% of benefits subject to income tax. Perhaps a lower COLA rate for high income seniors. I don't think it is sensible to discuss a 50% cut. Hell even Greek pension weren't cut that badly.

Now a few state and local pensions....
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Old 05-27-2013, 09:04 PM   #35
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It was just a counterpoint to the statement that you could wait until a change becomes imminent, apparently without impacting the decision. The break even point still moves later in life, and you can't go back to age 62 and change your decision.

Remember, I'm going for 70 myself. But I'm not going to blind myself to factors that might go against my decision. Delaying until 70 is taking a chance that there won't be any negative changes, or that they won't outweigh the benefits to me of waiting. Others may fear bigger changes or not be willing to take that chance.
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Old 05-27-2013, 09:37 PM   #36
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If I could start SS at 50 I would, even with correspondingly reduced payments, mostly because I have much uncertainty that I'll survive to the breakeven point.
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Old 05-28-2013, 03:10 AM   #37
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It was just a counterpoint to the statement that you could wait until a change becomes imminent, apparently without impacting the decision. The break even point still moves later in life, and you can't go back to age 62 and change your decision.

There's more to it than that. No one in power has even proposed changing the deal for current retirees. The closest thing that has even been discussed is chained CPI, which would have only a small effect on the break even point.

Yet someone who changes their decision on when to take SS based on potential policy changes is essentially betting real money that such policy changes will occur. To place a monetary bet on a policy change that isn't even being seriously discussed seems imprudent at best.
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Old 05-28-2013, 08:48 AM   #38
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It seems more prudent to base one's decision on the reality that SSA will be unable to meet full benefit obligations in 20 years rather than our politicians' failure to take unpopular action now. The longer they wait, the more severe the changes will have to be. Chained CPI would help, but that's not enough.

5 Huge Myths About Social Security has a pretty good write up of the situation and possible fixes.

I realize I'm veering into politics now so I'll be careful, but the topic does make me take a closer look.
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Old 05-28-2013, 10:07 AM   #39
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If I could start SS at 50 I would, even with correspondingly reduced payments, mostly because I have much uncertainty that I'll survive to the breakeven point.
Early-side longevity risk is, to me, the biggest reason to take SS early. If my dad wasn't still a fairly healthy 86 year old, I might not be putting "70" into the models, hehe.
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Old 05-28-2013, 11:29 AM   #40
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I fully expect to be means-tested well before I ever am eligible. All of my retirement scenarios, I put SS at ZERO. Anything I get from SS will be used to blow on fun stuff.........
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