Joining the OTHER 1%

[jon-nyc]

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.

 

[ejman]

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.

 

[Katsmeow]

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.

 

[Hermit]

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!

 

[mickeyd]

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?

 

[homestead]

This guy didn't retire until 85, wonder when he started SS.
Oldest Veteran, 107, to Celebrate Memorial Day With Cigars & Whiskey (VIDEO) | The Stir

 

[DeborahB]

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.

 

[M Paquette]

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?

 

[clifp]

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....

 

[RunningBum]

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.

 

[GrayHare]

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.

 

[jon-nyc]

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.

 

[RunningBum]

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.

 

[sengsational]

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.

 

[FinanceDude]

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.........

 

[clifp]

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.........

Really that seems unduly pessimistic, aren't you in your 30s or 40s?. So when you do FIRECalc runs you enter 0 into social security?

Are you planning on higher SWR rate?