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Just semi-retired and have a question
Old 01-17-2009, 08:26 AM   #1
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Just semi-retired and have a question

Hi-
I just retired/semi-retired from teaching after 38 years in the classroom. I'm almost 62 years of age. My retirement is with TIAA-CREF, and I'll begin to receive a life-time income from them on April 1st. I will only need at the beginning an income of about $50,000 a year, but with a modest COLA. therefore, I will receive only that amount from them per year. I'll let the rest of the accumulations with TIAA-CREF gather interest and even add to them until I'm 70. Being single, I should be fine. I purchased my own health insurance three years ago with a $1,600 deductible, and a premium of $3,600/year.

I'm debating about whether to get social security at 62 or waiting. Since I've lived most of my adult life overseas, my social security will only amount to $500/month. (I will get Medicare at 65) If I wait until I'm 66, it goes up to maybe $680/month. Is it really worth waiting that long for a measely $180 more per month, and how much can a person work after receving social security. Is there a limit to any amount of money you can take in?

Thanks for any feedback on this.

Regards,
Rob
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Old 01-17-2009, 08:38 AM   #2
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Rob, the question as to when to take SS is one of the most frequently debated issues on this forum. Here is a sample thread on the topic: When to take Social Security

On your second question, yes there is a limit on how much you can earn before your SS benefits are impacted but those limits go away once you reach full retirement age. You can find the earnings limits and a lot of other excellent SS information at Social Security Online - The Official Website of the U.S. Social Security Administration.
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Old 01-17-2009, 09:01 AM   #3
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Originally Posted by Rob View Post
I'm debating about whether to get social security at 62 or waiting. Since I've lived most of my adult life overseas, my social security will only amount to $500/month. (I will get Medicare at 65) If I wait until I'm 66, it goes up to maybe $680/month. Is it really worth waiting that long for a measely $180 more per month, and how much can a person work after receving social security. Is there a limit to any amount of money you can take in?
Rob, that "measly" $180 per month is a 36% SS raise. If you don't need it, I'd wait it out. Don't forget that all future SS COLA adjustments will be based on that 36% higher distribution, too.
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Old 01-17-2009, 09:16 AM   #4
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Rob, that "measly" $180 per month is a 36% SS raise. If you don't need it, I'd wait it out. Don't forget that all future SS COLA adjustments will be based on that 36% higher distribution, too.
I'm not so sure. As a single person, there is only one life-expectancy to be taken into account. In such a case, I would think it would be optimal to take SS at 62, and repay it later if you need/want the larger monthly check, since it is, in effect, an interest-free loan from Uncle Sam.
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Old 01-17-2009, 09:36 AM   #5
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Hi-
,600/year.

I'm debating about whether to get social security at 62 or waiting. Since I've lived most of my adult life overseas, my social security will only amount to $500/month. (I will get Medicare at 65) If I wait until I'm 66, it goes up to maybe $680/month. Is it really worth waiting that long for a measely $180 more per month,
Regards,
Rob
Making a simplistic calculation, $500 * (66 - 62) * 12 = $24,000.
Suppose you just saved that in a savings account until you turn 66 and then withdraw $180 per month to bring the total monthly inflow up to $680.
$24,000 / $180 = 133 months.

Completely ignoring any interest you'd be earning, that's 11 (eleven) years before your savings account is exhausted. IMHO, an 11 year break-even point is too long to be worthwile. Factor in interest earnings and it's a few years longer.

Plus, if you die before the 11 years is over, the remainder in the savings account is still there for you to will to somebody.
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Old 01-17-2009, 04:24 PM   #6
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I'm not so sure. As a single person, there is only one life-expectancy to be taken into account. In such a case, I would think it would be optimal to take SS at 62, and repay it later if you need/want the larger monthly check, since it is, in effect, an interest-free loan from Uncle Sam.
Reasonable alternative, but I have never been convinced that the option of paying back your social security will be available indefinitely. It's getting more popular and may go away - it's even now an application that at least theoretically must be approved, though such approval so far seems to be routine.
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Old 01-17-2009, 05:05 PM   #7
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I understand that in October or November of 2008 the total applications submitted or approved up to that point in 2008 was 7. I had read someplace about a year ago that it was many more, but the 7 seems reasonable. The cost to do so, even interest free, can be high. I did withdraw and reapply last year (2008). Application was quickly approved, no questions really.
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Old 01-17-2009, 09:02 PM   #8
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Reasonable alternative, but I have never been convinced that the option of paying back your social security will be available indefinitely. It's getting more popular and may go away - it's even now an application that at least theoretically must be approved, though such approval so far seems to be routine.
I am hoping to do this, but I'm still 9 years away from 62 and also sort of doubt it will be available by then. However, if they change it they'll have to announce it ahead of time. If I was in your position I would start taking the SS, and repay it when you reach age 70 or if they announce they are going remove the option. Just put the money in a safe (cash) investment, keep any interest, and then take the higher payment later.
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Old 01-17-2009, 09:56 PM   #9
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Rob, there are good arguments for taking SS at 62, and also there are good arguments for taking it at 66.

Reading through the lines of your post, I sense that really you want to take it at 62.
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