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Old 09-04-2015, 12:02 PM   #261
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Perhaps... I think of it more is just independent confirmation... I don't see a whole lot of experts suggesting that people take SS at 62 if they can afford to wait.....but I have found both Allen Roth and Mike Piper's stuff over the years to be pretty solid.
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Old 09-04-2015, 12:08 PM   #262
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Old 09-06-2015, 07:33 AM   #263
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So now the question becomes whether you would be willing to pay $74k for a $540 COLAed monthly annuity benefit. IMO if your health is good that's a good deal.
IMHO, that's on the same order as buying bread at the day-old store.
Does Warren Buffett buy bread at the day-old store?

Almost anybody who has the resources to forego SS for 8 years (62 to 70) has so much that the additional $540/mo is trivial.

$2M at 4% is $6667/mo. Adding $540 to that is not going to change your lifestyle.

$500K at 4% is $1667/mo. Adding $540 to that will significantly improve your lifestyle (assuming your heath at 70 is still good enough to do all the things you want to do.) But not as much as having had the $750/mo from age 62.

The people who can afford it don't need it.
The people need it can't afford it.
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Old 09-06-2015, 07:50 AM   #264
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Almost anybody who has the resources to forego SS for 8 years (62 to 70) has so much that the additional $540/mo is trivial.
Lots of people who can wait until age 70 don't think $540/mo (for as long as you live, adjusted up for inflation) is trivial. Some of those people are here.
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Old 09-06-2015, 06:33 PM   #265
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IMHO, that's on the same order as buying bread at the day-old store.
Does Warren Buffett buy bread at the day-old store?

Almost anybody who has the resources to forego SS for 8 years (62 to 70) has so much that the additional $540/mo is trivial.

$2M at 4% is $6667/mo. Adding $540 to that is not going to change your lifestyle.

$500K at 4% is $1667/mo. Adding $540 to that will significantly improve your lifestyle (assuming your heath at 70 is still good enough to do all the things you want to do.) But not as much as having had the $750/mo from age 62.

The people who can afford it don't need it.
The people need it can't afford it.

My social security estimates show an increase of almost $1000 a month from 62-70. That is no chump change in my opinion.


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Old 09-06-2015, 07:05 PM   #266
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.....$500K at 4% is $1667/mo. Adding $540 to that will significantly improve your lifestyle (assuming your heath at 70 is still good enough to do all the things you want to do.) But not as much as having had the $750/mo from age 62....
The $540 a month that would change your lifestyle is based on a $1,000/month benefit at age 67 and $700 at 62 and $1,240 at 70.

If I had $500k and was in good health and longevity, I would be willing to forgo $67,200 ($700/month *8 years... and use 13.5% of my $500k) to increase my pension from $700/month to $1,240/month with a COLA for the rest of my life. That's a huge increase for a modest give up IMO.
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Old 09-06-2015, 07:14 PM   #267
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Lots of people who can wait until age 70 don't think $540/mo (for as long as you live, adjusted up for inflation) is trivial. Some of those people are here.
I think both the trivial and nontrivial points of view are represented here which is why these threads never reach consensus. I am pretty sure there at least some posters here who would not run out of money if they lived to be 200 no matter when they took SS.

For those worried about longevity insurance, then waiting to claim may be the best choice. Or for those with a volatile portfolio who would like additional relatively stable and secure income, waiting may also be a good choice. For some of us the decision is not cut and dried. It all depends when we die and what happens to benefits and tax rates in the future, which we only know after our choices have been made.
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Old 09-06-2015, 10:47 PM   #268
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Curious, if someone continues working past age 70 earning higher inflation-adjusted income (e.g. via a Personal Care Agreement for a parent or sibling) compared to some of the lower earning years, does that increase benefits even if you've already started claiming SS?
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Old 09-07-2015, 01:55 PM   #269
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It all depends when we die and what happens to benefits and tax rates in the future, which we only know after our choices have been made.
And, for a few, it depends on whether one spouse is impacted by GPO. That was the decision maker for us..........
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Old 09-07-2015, 03:39 PM   #270
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Does anyone know if the recommendation to delay depends on the state of the market? I am wondering whether it ever makes sense to take ss earlier if you are in a major down market. For example would you be better off taking early ss in 2008 rather than taking money out of the market?


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Old 09-07-2015, 03:41 PM   #271
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Opportunity cost is certainly a factor but you need to make an assumption on that.

Chillin' by the lake today... suspect that you are too.
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Old 09-07-2015, 03:50 PM   #272
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Does anyone know if the recommendation to delay depends on the state of the market? I am wondering whether it ever makes sense to take ss earlier if you are in a major down market. For example would you be better off taking early ss in 2008 rather than taking money out of the market?
I don't know what Kotlikoff anyone else recommends, but it sure made sense to me to take SS early when I was in precisely that situation in late 2008. I was relieved to be able to slow the bleeding from my retirement savings, which at that time was my only source of income.

It was absolutely the right thing for me to do psychologically. I've never looked back and have zero regrets for not waiting. YMMV...
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Old 09-07-2015, 03:53 PM   #273
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Chillin' by the lake today... suspect that you are too.
Actually with my son in the carolinas looking at a couple of colleges. Interestingly it is cooler here than in vermont this weekend.
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Old 10-30-2015, 10:23 AM   #274
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I just received an email from the 'Maximize My Social Security' regarding the recent changes to SS. "Our engineers are modifying our software in anticipation of these changes to Social Security." The email also listed the following changes to SS as of Oct 29, 2015
"
  1. For those becoming 62 after this year, deeming is extended through age 70. Deeming is the requirement that if you take a spousal benefit or a divorcee spousal benefit you need to also take your retirement benefit and vice versa. This leaves you with roughly the larger of the two benefits.
  2. Starting in 6 months, no one can collect a spousal, child, or divorcee spousal benefit based on the work record of a worker while that worker's retirement benefit is in suspension.
  3. No one whose retirement benefit is in suspension can collect an excess spousal or excess widow(er) or excess divorcee spousal or excess divorcee widow(er) benefit.
  4. Those who suspend their retirement benefits can no longer receive their suspended retirement benefits in a lump sum payment."
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Old 10-30-2015, 10:31 AM   #275
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Interesting.. so it looks like the benefit to singles of file and suspend are being eliminated too (item 4). I'll study this more intently in a couple years as DW approaches 62 and again when we approach FRA, but I suspect the decision will be the same but just a tad less beneficial than before.
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Old 10-30-2015, 10:58 AM   #276
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The deeming thing is what affects DW. She's only 57. I ran the numbers and it looks like it will only cost her $5K over her lifetime, so not so bad (she is subject to GPO so that puts a damper on her benefits anyway.)

As soon as I posted that other letter, a new letter from 'Maximize My Social Security' just arrived with some changes to the list of items 1-4. "These changes impact three groups: those who will reach full retirement age in the next six months, those who are currently between 66 and 70 years old, and those between 66 and 70 who have already used the file and suspend strategy. "

  1. For those becoming 62 after this year, deeming is extended through age 70. Deeming is the requirement that if you take a spousal benefit or a divorcee spousal benefit you need to also take your retirement benefit and vice versa. This leaves you with roughly the larger of the two benefits.
  2. No one can collect a spousal or child benefit based on the covered earnings record of a worker who suspends retirement benefits more than six months after the bill becomes law during the period that the worker's retirement benefit remains suspended. The treatment of divorcee spousal benefits in this context is unclear.
  3. No one who suspends his/her retirement benefit more than six months after the bill becomes law can collect an excess spousal or excess widow(er) benefit. The treatment of divorcee excess spousal benefits in this context is unclear.
  4. Those who suspend their retirement benefits can no longer receive their suspended retirement benefits in a lump sum payment.

It's on their website https://maximizemysocialsecurity.com/node/688
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Old 10-30-2015, 11:13 AM   #277
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The change certainly appears to affect us.
I filed and suspended and DW began taking spousal at her FRA.
She is two years younger and our SS benefits are roughly the same.

So it seems that in six months she will be forced to switch from taking the spousal benefit to taking her own benefit, losing the option to defer it until age 70. That means a lifetime lower benefit in exchange for some spousal benefit up front.

I certainly hope they pass a correction to this, but I'm pessimistic.
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Old 10-30-2015, 11:20 AM   #278
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The change certainly appears to affect us.
I filed and suspended and DW began taking spousal at her FRA.
She is two years younger and our SS benefits are roughly the same.

So it seems that in six months she will be forced to switch from taking the spousal benefit to taking her own benefit, losing the option to defer it until age 70. That means a lifetime lower benefit in exchange for some spousal benefit up front.

I certainly hope they pass a correction to this, but I'm pessimistic.
My impression was that you are grandfathered in. It's the people who want the start the F&S after 6 months after bill signing that are out of luck.
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Old 10-30-2015, 11:25 AM   #279
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My impression was that you are grandfathered in. It's the people who want the start the F&S after 6 months after bill signing that are out of luck.
I've seen information both ways. Some say we're grandfathered (well, grandmothered in our case), and some say not. This is all so sudden and confusing it reminds me of the "You have to pass it in order to read it" brouhaha of a few years ago.
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Old 10-30-2015, 12:28 PM   #280
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The change certainly appears to affect us.
I filed and suspended and DW began taking spousal at her FRA.
She is two years younger and our SS benefits are roughly the same.

So it seems that in six months she will be forced to switch from taking the spousal benefit to taking her own benefit, losing the option to defer it until age 70. That means a lifetime lower benefit in exchange for some spousal benefit up front.

I certainly hope they pass a correction to this, but I'm pessimistic.
A "correction" would mean fixing an unintended consequence. I think the bill does exactly what it intends it to. You can hope they won't pass the bill at all or back it out, but as I understand it they are fixing something they never really intended people to get in the first place.
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