rescueme
Thinks s/he gets paid by the post
Correct.
However, just remember that your spouse will have to file before you can get the 50% spousal FRA benefit.
It's a good option for a lot of folks, but there are rules that must be followed.
Misconceptions About Delaying Social Security
- Thread starter veremchuka
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However, just remember that your spouse will have to file before you can get the 50% spousal FRA benefit.
It's a good option for a lot of folks, but there are rules that must be followed.
I took SS at 62 and a rough calculation of the break even point for me is about 75. Sure it's nice to have extra money, but what if you don't live that long? The average man may not live past 74. How many people die before 62, plenty I know of.
travelover
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This is a really great point. I'd imagine that one could actually make a detailed study of this and create something like an actuarial life table.
Actuarial Life Table
Not true. At age 60, the life expectancy for all USA males - the average - is 81. At 62, it's even higher.
Chuckanut
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Interestingly, I ran FireCalc with SS at both 66 and 70. The outcomes are less than 2% apart based upon my assumptions. Given the uncertainties of my assumptions, I figure that is within the margin of error.
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That may be so, but 30% die before the age of 65. Next point is what physical and mental condition is this person in? Bad heart, knees, hips and so on. My point is the younger you retire the more fun stuff you still can do, until you start to slow down. Lets face it after 70 we start to age in dog years.
travelover
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....Next point is what physical and mental condition is this person in? Bad heart, knees, hips and so on. My point is the younger you retire the more fun stuff you still can do, until you start to slow down. Lets face it after 70 we start to age in dog years.
Not everyone here would assume that retirement and initiation of SS would be at the same time.
W2R
Moderator Emeritus
Source? This 2004 publication by the CDC, says in Table 1 that 17.4% of the general U.S. population, and in other tables says that 20.1% of the white male U.S. population, or 21.4% of the general male U.S. population, die before the age of 65.
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REWahoo
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ERD50
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How do you get that number from the tables travelover linked?
Remember, it's not a 'life expectancy' number that counts, it's the life expectancy at a certain age (because you already reached that age, the earlier deaths do not apply to you). Look at the column with number of lives remaining out of 100,000 - I think that's easier to understand.
At age 62, there are 83,724 males alive out of the original 100,000. If 30% of those die, we are left with 58,607 (83724 * 0.7= 58606.8). That number is ~ age 76-77. The 50% point is out around age 82-83.
For most of us who are considering delaying SS, it isn't about optimizing the number for an average, it's about having some insurance that we have enough money if we (or our spouse) make it to old age. And with the security of that amount in old age, it might allow us to spend more in our early years (run the numbers for your situation). And spousal benefits can be a very big deal for some.
-ERD50
W2R
Moderator Emeritus
I just KNEW there was a good explanation for the discrepancy.Nine year old data and everyone knows inflation is a killer. Really.
Mike Piper
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For a person making the claim-now-or-later decision, the only life expectancy that is relevant is their life expectancy at that point in time (and, if married, their spouse's life expectancy at that point in time).
In other words, life expectancy at birth is meaningless to somebody who has already reached age 62.
Edit: Looks like ERD50 beat me to it.
In other words, life expectancy at birth is meaningless to somebody who has already reached age 62.
Edit: Looks like ERD50 beat me to it.
ERD50
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How long of a profile did you use? I wouldn't expect to see a big difference until you went out past 30 years, and the success rate will start to increase again if you go over 46 years or so (once 1966, a bad year, drops out of the test, so keep the profile length below that point). As I mentioned, this is really longevity insurance you are buying, so the advantage will only be there if that longevity comes to be.
Another consideration is, if the portfolio does OK between ages 62 and 70, delaying is not 'painful', and probably not harmful to the portfolio success. Several posters here did take SS earlier than planned when the recent dip hit us. The full draw down during that dip might affect success rates. That makes sense for their situation, and might make those general runs in FIRECalc, where the same rules apply to all time periods, a little 'off'.
-ERD50
mpeirce
Thinks s/he gets paid by the post
So how does it work if the higher earner is younger? Or doesn't it?
OP
OP
veremchuka
Thinks s/he gets paid by the post
So I'll hijack my thread.
I started to notice in my 30's how many people I knew were dying. Not a lot but some so I started to really watch the obits.
I came to the conclusion from looking at the ages in obits of the general population over time that if you make it to say 60 or 62 you have a good shot at the later 70's and above. A lot of people die in their 30's and especially the 40's and 50's and I still see that today.
I assume others have noticed this too. I associate it with hereditary or life style diseases that kill you in that time frame, get past that and pass go and collect another 15 or 35 years.
I started to notice in my 30's how many people I knew were dying. Not a lot but some so I started to really watch the obits.
I came to the conclusion from looking at the ages in obits of the general population over time that if you make it to say 60 or 62 you have a good shot at the later 70's and above. A lot of people die in their 30's and especially the 40's and 50's and I still see that today.
I assume others have noticed this too. I associate it with hereditary or life style diseases that kill you in that time frame, get past that and pass go and collect another 15 or 35 years.
Veremchuka, I think you may be forgetting the difference between life expectancy at birth and life expectancy at [any] later age.
In 1930, life expectancy at birth in the US was 59.7 (all races, both sexes)
In 2010, it was 78.7, almost a 32% increase in 80 years.
But the older you get, the more likely you are to get still older.
In 1930, life expectancy at birth in the US was 59.7 (all races, both sexes)
In 2010, it was 78.7, almost a 32% increase in 80 years.
But the older you get, the more likely you are to get still older.
Koolau
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I found it interesting that, based on the examples in the article, the difference (lowest to highest) was about 10K out of about 765K. Not a huge difference no matter what option one chooses. One complicating factor in the examples is assuming that benefits are paid (life expectancy in the example) to age 85. Maybe the results would be much different if the expected age were (for instance 81). Anyway, I think the article argues for choosing OTHER reasons to pick a benefit date than the TOTAL benefits received over a reasonable life time (in this case to age 85).
With that in mind, I have identified one main reason to wait until 70 to begin benefits (for me): DW signed off to take a lower pension survivor benefit (current monthly pension benefit is increaseD). So, at 70, I will maximize my SS benefit and upon death, DW will have the highest possible SS survivor benefit available to her.
Obviously, there are many nuances in the decision, so, as always, YMMV.
timo2
Thinks s/he gets paid by the post
So I'll hijack my thread.
I assume others have noticed this too. I associate it with hereditary or life style diseases that kill you in that time frame, get past that and pass go and collect another 15 or 35 years.
That's how actuarial tables work. It is really interesting, but this knowledge can elicit unintended schadenfreude over living longer, it seems.
Actuarial Life Table
haha
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According to US Actuarial Life Tables, for males the probability of death in any year falls from birth to the 10th year of life, then climbs slowly but steadily until there is a brief reversal from age 25-27. After Age 27, the death rate rises again slowly but steadily for the rest of a lifetime.
Actuarial Life Table
Actuarial Life Table
Chuckanut
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I went out to 35 years. I retired later than many, probably most, people here, though a few years earlier than my official full retirement SS age.
Yes, delaying SS as a form of longevity insurance is exactly what I plan to do.
When I say not much difference, I am looking at the maximum amount I can spend with a 100% success rate.
The period between 62 and 70 is very important to me since I will get no SS and plan to spend quite a bit more doing things I may not be able to do in my 70's and 80's.
Even allowing for that, with my assumptions used in FC - including three big lump sum expenditures between 62 and 70 - there is not much difference. It does help that I am still thrifty even when spending more than usual. "Selected Data on Aging, by Walter Vom Saal, is 30% die before age 65" Whether this data is right or wrong, I didn't know myself so I looked it up on the web. But I must say that once you reach a certain age, your chances of making it longer seem likely. Rather than compare it to age 1 to age 65. But then again it may not apply to me. Maybe I'll be lucky maybe not, I am not a gambler I took SS early.
Doesn't matter if that higher earner waits till his/her FRA for spousal benefit. Gets 1/2 the spouse's FRA benefit regardless between their FRA & age 70 or whenever after FRA the higher earner starts taking their own increased SS benefit.
haha
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Hey, it's on the internet, it must be true, right?
A few posts back I linked what the Chief Actuary of the SS system says about this. Here is what he says: Males, Age 0 start with 100,000 lives; males age 65, 80,308 lives left. Now to me, that doesn't look like 30% have died before age 65, no matter what Mr. Von Saal says.
Let's try females, maybe they die more before age 65 with childbirth and all. Females, age 0, 100,000 lives; females, age 65, 87,769 lives.
Whoops, doesn't seem like 30 % of the ladies die before age 65 either.
Maybe the SS Chief Actuary is poorly informed?
Ha
Peter
Full time employment: Posting here.
Well, it was "selected data" ...
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