New Scott Burns column on Social Security

New column today. Bottom line: Married men and single women, wait as long as possible before beginning to draw SS. Married women, begin drawing SS as early as possible. The column gives more detail, of course.

[cute fuzzy bunny]

Except for all the situations and financial aspects that make that a bad idea. Note they do not incorporate any aspects of the "more money when quality of life is higher" line of thought, and that they presume the money will be invested and that the estimated "3% real rate of return" is most certainly a retirees best effort. They also remove the decision from the greater financial picture, which has already been demonstrated with real numbers to be a mistake.

The real interesting part is this...from the article:

"That's the conclusion of a recent study by economists Alicia Munnell and Mauricio Soto at the Center for Retirement Research at Boston College."

From the Boston College web site:

"The Social Security Administration has recently awarded Boston College a grant of $5.25 million to set up a retirement policy research center."..."The Director of this new Center will be Alicia Munnell (CSOM). She is...a former Assistant Secretary of the Treasury."..."This center will not focus on health issues"

Uh oh...the guys who want you to keep working and feeding into the SS pool as long as possible paid for all this 'research'. Now you know why I always say to check sources before taking up any bullet points from a newspaper column.

Alicia has also been quoted as saying "The financial gains from an additional year of work are really impressive,".

While this is true, it may betray either her personal belief or a direction that the organization the SSA has founded is based on: Keep people working, keep them away from taking their benefits as long as possible. You know what Alicia...I'm betting the financial gains from working until you drop are really impressive too.

Obviously an organization funded by the social security administration, headed by a former assistant treasury secretary, who isnt factoring in health issues...is going to come up with a very unbiased opinion.

But then again, the people who have already made the decision will find this supportive "documentation" comforting.

[Nords]

Originally Posted by WhodaThunkit

Ah, yes . . . they're all part of the great worldwide conspiracy against you

WhodaThunkit, while you certainly don't have to get along with TH, you also don't have to continue this public sniping. You posted a good link, I enjoyed reading the article, and it makes me think. But that doesn't mean everyone's going to agree with you.

I think that tracking the authors & motivations of these studies is a very valuable guide to their validity. As a master of manipulating customer opinions through the judicious application of his employer's funds toward similar "studies", TH knows what he's talking about.

He's done the work & reported his results with his opinions. It's a good post. It's not a personal attack on you and you shouldn't feel obligated to air your personal dispute in public. It's not about you, so kindly get over it.

[cute fuzzy bunny]

So what you're saying is that its a bad thing to identify the sources and potential motivations of the suppliers of information? Just swallow it?

I see.

If I hadnt been one of the guys paying these artificially created think-tanks to produce the results I wanted for much of my employed life, I'd probably be a little less cynical.

If we can set aside the obvious enmity you have for me, and that you've shown no interest in dissenting data to your preset opinion, I'll offer this:

For someone working without adequate savings...they're going to have to keep working until the monthly cash flow situation - with or without social security - is adequate. They simply have no choice.

For someone who cant work, they'll have to take social security when its available. They simply have no choice.

For someone who could retire and take social security early, if they simply dont need or couldnt spend the money, the numbers say that taking it early and investing it in rational, reasonable investment vehicles will push the break even past 81 years old. The age at which most people will expire, on average. So if you think you'll live longer than that and will be able to enjoy the extra money more in your 80's than your 60's...then wait. Otherwise take it early.

If you're an early retiree, the firecalc numbers I've run show that adding an income stream to an investment portfolio consistent with an early social security paycheck increases portfolio survivability, annual withdrawals and terminal portfolio sizes in every case with any reasonable investment mix vs taking it late.

If you're married, will live long enough to take it late, and your financial situation requires the higher income levels for a spouse that may outlive you...then wait.

As you can see, there are a lot of different factors, types of people and situations that should be considered.

If you were a little less "this is a slam dunk" (because if anything, its practically a slam dunk to wait) and were a little less passive aggressively hostile to people with alternate opinions, this would be a somewhat more productive discussion.

[cute fuzzy bunny]

Ah yes. My "Screed", complete with reliable, repeatable sources and actual data, vs your well valued opinion based on newspaper columnists, books on finance and investing written by "marketing executives" and think tanks funded by biased agencies.

On the other hand, we've never determined your issues with or what is 'wrong' with my 'screed', as you wont discuss any specifics. You only wish to spend lots of time discussing how you wont discuss the actual issues.

I personally dont know Scott Burns. I've read plenty of his columns. Agreed with some. Disagreed with some. Found his numbers and process for coming to his conclusions to be somewhat constrained at times, and attributed that to the limits of short column space.

But I dont take his every opinion and source, hook line and sinker.

[cute fuzzy bunny]

I didnt say he was ignorant of the subject matter. I pointed out that his primary choice of occupation and how he describes himself in his biography is inconsistent with a career in finance and expertise in retirement.

My wifes ex husband is a CPA. He's also an idiot. How about you?

So let me get this straight. What were your expectations when you saw this newspaper article and posted it. Were you hoping to help people avoid the wrongheaded opinions of a bunch of anonymous internet posters, controlled by bullies, by posting as an anonymous internet poster?

Or were you just a little bored on a sunday morning and felt like doing a little trolling for attention?

Going back to the actual topic. This forum is dedicated to early retirees. If you're an early retiree or just projecting for when you will be, do this. Open firecalc, put in your portfolio numbers, years, investment mix, all that good stuff you always do. Now put in your expected social security payments if received early and if received late. The SSA will send you a nice form telling you what the numbers are if you dont know, just go to their web site. See what the differences are between an income stream at 62, 65 and 67 (or whatever years work for you). See which ones look best to you.

Its that easy. Someone gives you the numbers, and someone gives you a tool to use them to see how they'll affect your early retirement.

For those that in their 40's and 50's dont think they'll need the extra money...I sure dont plan on fixing my own roof, changing my own oil and cooking all my own meals when i'm in my 60's. And for my personal firecalc run, I get to spend an extra chunk of change EVERY YEAR starting now in my mid 40's and that I'll leave more money to my son when I die. No downside. Thats one tough choice...

[kat]

Just want to point out the BC center has also publicly said that without social security, many retirees would be destitute. In fact, with social security, many retirees are destitute.

I value knowing where the funding comes from. In this case, having read a lot of the work of the BC center, I don't see a conflict. I think they published material that argued against switching to the personal accounts Bush wanted, for example.

And BC, if you didn't know, is pretty liberal, politically.

[SamHouston]

I've read Scott Burns columns for a long time and have gotten a lot out of them because Burns writes in such a clear style as opposed to some of the other financial columnists.

I understand what he's saying in this case, but I disagree with his logic for me personally. I don't plan to be "dependent" on Social Security payments making the real difference in my life as a retiree. I've paid into the fund for a good 40 years now and when I start to collect monthly payments I will look upon them as the gravy that gives me a few options to do some of the "fun" things that I look forward to doing in retirement.

For that reason, I will want to start the checks coming while I'm still young enough to do those "fun" things. So waiting as long as I can to start collecting from the Social Security folks is not a good option for me. I can see where it would be the best option for those who need the money more for survival than I will need it, but it's not a "one size fits all" situation.

[cute fuzzy bunny]

Originally Posted by WhodaThunkit

So, suppose you are 62 YO, with a portfolio of a million, 60/40 stock/bonds, and a planning horizon of 33 years (to age 95 -- this is joint for you and the spouse, because of the survivor's benefit). According to the info I got from SS, my SS at age 62 is about 18,000 per year, and about 32,500 at age 70.

Case 1 -- begin taking SS at age 62. Firecalc says a WD of 44,500 (95%, 33 years), giving total cash of 44,500 + 18,000, which is 62,500.

Case 2 -- begin SS at age 70. At age 62, set aside a bridge in TIPS or a MM account to cover the 8 years to SS at age 70, which comes to 260,000, leaving 740,000 in the portfolio. Firecalc says 32,930, giving a total cash flow of 32,930 + 32,500, which is 65,430, beginning at age 62 (from the bridge money).

We already covered this. There is no reason to 'set aside a bridge in tips or a mm account'. You are artificially reducing the portfolio size by removing money from it and setting it into a construction with an inferior return rate to produce the numbers you want. If you leave the money in the portfolio, you get a higher withdrawal, higher survivability, and higher terminal size. Every time.

We already had this discussion and we'll come to no different conclusions. While I may be an idiot and probably a bully by your definition, you are either a troll or a gullible and obstinate person with poor financial skills.

[cute fuzzy bunny]

Originally Posted by kate

Just want to point out the BC center has also publicly said that without social security, many retirees would be destitute. In fact, with social security, many retirees are destitute.

Thats true...CRS found the following:

• Twenty-eight percent of those 65 or older - many of them grandmas and grandpas - had incomes of less than $10,000 in 2004. Ten percent had incomes of $50,000 or more.

• Social Security paid benefits to 88 percent of these older Americans. It is the largest single source of income among the aged.

Sixty-nine percent of Social Security beneficiaries age 65 or older receive more than half of their income from Social Security.

For 39 percent of elderly recipients, Social Security contributes more than 90 percent of their income.

For nearly one-quarter of recipients, it is their only income.

[REWahoo]

Originally Posted by WhodaThunkit

Most people who come here are interested in information about SS. Burns is a well respected source, and he has published some new information. Consequently, I expected that many people who read this forum would also be interested in Burns's work, and might look at his current column.

Whoda, I totally agree with you. Had you not beat me to it, I was going to post a reference to Burns SS column. I also know that there are two (at least) sides to every story and am interested in hearing both (all) of them. Even if they are posted by members of the lonely hearts club, prisoners of desire, or ex-members of the light brigade wearing fuzzy pink slippers.

[cute fuzzy bunny]

Hey, i'm not saying it isnt worthy information to rehash the discussion again.

If you'll read my question again, I was asking why the OP posted it, considering his/her obvious disdain for this "forum of bullies".

Now he/she will claim that its only a few people. I suppose then I'll have to pull out the quotes from other threads where the claims were far more broad spread.

So you have a place where you know you're going to get a negative reception. You dont like some people there. You know you're going to get jumped on. Why invite what you claim is going to be supressive harassment unless you like it? Thats all I was trying to get to the bottom of.

By the way, anyone want to dig up and link the scott burns article from about 14-16 months ago where he espoused taking SS early, replete with slam-dunk calculations in support of that idea?

I guess next year he'll split the middle and say to take it at 65? Or suggest working until you drop as he plans to?

Oh yeah, and that "total cash flow" thing? What was that saying my old vp of sales had at my first sales job? Oh yeah... "INCORRRRECT, asshole!" What'd you do to get that result? Tie an arm and a leg behind your back and burn half the portfolio (PPI adjusted) annually in a fireplace to reduce your gas bill?

[REWahoo]

Here is a link to some previous discussions and articles on delaying taking SS benefits:

http://early-retirement.org/forums/i...86458#msg86458

As I said in that post, it is interesting that as the leading edge of the boomers get close to 62, we start seeing articles about delaying taking SS to age 70, etc. One fact not discussed in any of these articles IIRC is the double benefit (to SS) of the delayed SS recipient 1) continuing to work and contributing to SS and 2) the obvious benefit of delaying the SS fund draw down.

I rarely adhere to conspiracy theories, but this makes me very suspicious. Until recently I had never seen any press on the benefits of delaying beyond the "full benefit" age of 65 or 66. Did I miss something?

EDIT: I did find one explanation of the sudden appearance of all the "delay SS" topics:
http://early-retirement.org/forums/i...86545#msg86545

[cute fuzzy bunny]

I just hope that anyone who is still bothering to read this sees clearly that I devoted a great deal of energy to discussing this matter factually and without personal attacks until both myself and Nords were subjected to angry and undeserved retorts.

I'll also note that I took great care in looking back through "whodathunkit"s posts to see if I had ever responded to anything he/she wrote in a manner that would have inspired any anger. Excepting some sarcasm during the last social security "great debate" after trying hard to get him/her to discuss the issues openly, I see nothing.

I see in looking at his/her collective posts that he/she first showed up in one of the first discussions on social security, accompanied by several other anonymous or first time posters, all of them patting each other on the back. Never a "Hi, I am" or any mention I can see of his/her retirement plans, whether he/she is ER'ed, or very much specific information at all. Just sort of hit the ground making snarky comments. The other anonymous/first time posters appear to have sunk back into the ground after that initial social security discussion ended.

I also see he's had hostile exchanges with a number of people who disagreed with him/her. I guess its comforting that I'm not the only one thats created disdain.

[Nords]

Originally Posted by WhodaThunkit

So, I have incurred the disapproval of both forum bullies?* You try getting over this, Nords --* Moderator permitting, I will post whatever I damn well choose to.

"Bullies"? Yikes!

Don't worry, WhodaThunkit, I won't moderate your posts. I wouldn't want you to feel that I was being less than objective about your contributions. The other moderators can figure out when you've exceeded the limits.

Good talking with you, you have a nice life now.

[sgeeeee]

Originally Posted by WhodaThunkit

New column today.* Bottom line:* Married men and single women, wait as long as possible before beginning to draw SS.* Married women, begin drawing SS as early as possible.* The column gives more detail, of course.

Thanks for the post. *I used to be squarely in the "take it as soon as you can" camp. *But as I've read more and analyzed various risks, I'm beginning to lean toward a straggled approach -- DW take it at 62 while I wait till later. *Getting a larger COLA'd annuity is significant insurance against outliving your portfolio. *

But DW and I (at 50 and 51) don't have to decide for awhile. *I may change my mind again by then. *

[Jarhead*]

I think most people take Soc. Sec. at 62 because they need it.

If you have reached this age, and do not, congratulations for being in a position to play "Soc. Sec. Futures".

My wife and I both took Soc. Sec. at 62, and any mistake on that front would pale in comparison to some of the "boners" I pulled early on in life.

May be fun to argue about, but the information I've seen puts it in the "Crap-Shoot" territory.

Regarding conspiricy theories, I can understand the Feds motivation by keeping you at the pump as long as possible.