New Social Security study on claiming it too early

[RunningBum]

Quote:

Originally Posted by youbet There was no bias. I was simply saying that my strategy to protect DW financially should not be engaged in if you were not a prudent and disciplined investor. I know folks (some very well) that in the same situation would have failed to receive the monthly SS payments and promptly invest them in a prudent manner (I chose the TSM) for the entire 8 years. If you don't trust yourself to do that, then I couldn't recommend the strategy. Is it that hard to understand that someone else's life situation is legitimately different that yours?

My point was that you associate prudent with taking at 62, and undisciplined as someone who take at 70. A prudent investor might well look at today's market, for example, and decide it's a good time to take some off the table and live off it, while getting a safer return by delaying SS.

Understanding one's own biases can be difficult too.

[Dtail]

Quote:

Originally Posted by zinger1457 Here's an interesting life expectancy calculator that takes into account your life style and health. Will show your life expectancy and % chance or living to various ages based on your input. This is from a company selling annuities so maybe the numbers are a little optimistic. I did change my data to test the effects of poor health/lifestyle and the numbers did drop drastically. https://www.blueprintincome.com/tool...g-will-i-live/

Used the calculator and got 94 years. Better up my retirement calculator longevity a little bit. lol

[Rianne]

I also used calculator and got 93 years.

My question is regarding SS and Independent Living or nursing home arrangements. We do not have LTCI. Would a nursing home look at your portfolio and figure out if you could afford LTC by the stock market performance or a guaranteed income from SS and pension? I know the LTC facility for my mom (the best, most expensive one) wanted her complete financial picture before they'd even consider her admittance. If I want the very best LTC, and I'd be healthy enough to wait until 70, along with DH, it's worth it for me to wait. After all, $32 K per year vs $60K per year, might make a difference for an elderly person who needs high maintenance medical care.

[Teacher Terry]

Joe, because of WEP it’s a tiny amount of 363. Yes we can use the money to go out and have fun. If I had still been working I might have waited until 70 but doubt I will make it to 80 with all my chronic health issues. So that’s the other reason for not waiting. My husband’s doubles from age 62 to his FRA of 66 & 10 months also small due to WEP. He will take it somewhere between those ages depending on if we need it.

[joeea]

Quote:

Originally Posted by Teacher Terry Joe, because of WEP it’s a tiny amount of 363. Yes we can use the money to go out and have fun. If I had still been working I might have waited until 70 but doubt I will make it to 80 with all my chronic health issues. So that’s the other reason for not waiting. My husband’s doubles from age 62 to his FRA of 66 & 10 months also small due to WEP. He will take it somewhere between those ages depending on if we need it.

So you didn't need it. It was just so small that it didn't matter much when you took it. Got it.

It was just confusing when you said that some people take it at 62 because they need it and then talked about waiting until FRA.

For the people that "need it" most of them would be best served to wait as long as they could, if they could find a way to do so.

[CardsFan]

Quote:

Originally Posted by joeea So you didn't need it. It was just so small that it didn't matter much when you took it. Got it. It was just confusing when you said that some people take it at 62 because they need it and then talked about waiting until FRA. For the people that "need it" most of them would be best served to wait as long as they could, if they could find a way to do so.

And who should make that decision? The people, or some government entity?

The article implies the government should. Are you agreeing with that?

People make bad decisions everyday (self included). That's Life.

[Teacher Terry]

Joe, with my job gone there would be no fun money without it. I have known many at 62 that need it to live. We are choosing not to spend our savings because it’s not big.

[joeea]

Quote:

Originally Posted by CardsFan And who should make that decision? The people, or some government entity?

Realistically, every decision in life can't be left in individual hands.

Quote:

The article implies the government should. Are you agreeing with that?

Nope. Not me.

I do like the nudge the report suggests: "Instead of portraying age 62 as the “early eligibility age,” age 62 could simply be labeled the “minimum benefit age” while age 70 could be labeled the “maximum benefit age.” " I believe that would improve some folks' choices, while still leaving the decisions completely in their hands.

Quote:

People make bad decisions everyday (self included). That's Life.

Everyone is free to make all the bad decisions they choose as long as I don't have to pick up the pieces.

I'd like to think education and solid data would help people make better decisions in their own self interest. Even then, many do not. I find that sad.

[joeea]

Quote:

Originally Posted by Teacher Terry Joe, with my job gone there would be no fun money without it. I have known many at 62 that need it to live. We are choosing not to spend our savings because it’s not big.

That close to the edge. I understand.

Good luck.

[razztazz]

Quote:

Originally Posted by joeea I'd like to think education and solid data would help people make better decisions in their own self interest. Even then, many do not. I find that sad.

The problem is essentially intractable. People always make decisions in their best interests. As they perceive their interest and as they understand the inputs and choices at the time the decision is made.

Yes, some people are just loony. They really do know better but make the foolish choice anyway. I don't think most do that. They really do make, what to them is, the right or smart choice. Knowingly. Willingly. It's just not the actual smart choice. Education might solve some of that, sure. Everybody on this forum can probably admit to some "if only somebody had clued me in to that back when....! But there's too many variables that influence people's decisions. If the best/right/smart thing for each of us were really all that pre-knowable the world would be a lot simpler

[Teacher Terry]

Joe, we have other things we can cut from our budget but don’t want to. We are fine. Our international travel may be over but we have done a lot more than many people we know. When one of us dies the other will be fine because we did the 100% survivor benefit. My ex and I had 800k saved but only 100 k could be found. I should have hired a private investigator while we were still married. Plus we could downsize from our small house and move into the condo complex I used to live in and free up equity. We have lots of options or move to a lower cost of living.

[joeea]

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Originally Posted by razztazz I don't think most do that. They really do make, what to them is, the right or smart choice. Knowingly. Willingly. It's just not the actual smart choice.

I think most people make the automatic/default choice without much thought at all.

I think creating good defaults in systems can help a lot.

[Big_Hitter]

Quote:

Originally Posted by jebmke There are no guarantees of course. If you have no major health issues and longevity runs in the family, those would be my indicators.

yep

[Gumby]

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Originally Posted by youbet Yep. That's what makes the planning (guessing?) about FIRE so interesting. We can make whatever assumptions we wish about the future but only time will tell....... So, in the case of the interesting "When to take SS" question, only the passage of time will show if you got lucky with your choice or not. 62, FRA, 70, any of these might prove to have been best as we look back years from now. My primary goal was to protect DW (who cannot collect any of my SS now or as a survivor due to GPO) so I started SS at 62 and invested the money monthly. It turns out, through nothing I had anything to do with, those were very favorable years to be periodically investing into the TSM, so it appears I'll be as well off financially (per FireCalc) as if I had waited until 70 to collect SS. Plus I provided for DW's benefit. But only the passage of time, as you correctly point out, will prove if it all pans out. And, of course, this can be said for any SS scenario.

Precisely our situation and our plan.

[mickeyd]

Many folks just do not understand that 8% per year extra is in their favor. Delayed gratification is an unknown to them.

[timo2]

Quote:

Originally Posted by mickeyd Many folks just do not understand that 8% per year extra is in their favor. Delayed gratification is an unknown to them.

I think they get it. But people have other issues going also. and some people think their private plan is safer than SS, while others think SS is safer than their private plan. So IMO the consideration of waiting to 70 is only partially a strict financial one. Human emotion and bias also come into play. That's how humans are drawn (apologies to Jessica Rabbit).

Back to your point though, adding to the 8% is inflation adjustments. DW has WEP, but her lump sum is not inflation adjusted so it becomes less and less of a hit as the years pass. So me waiting until 70 it gets the highest possible amount for a survivor benefit to start subtracting WEP and possible future haircuts.

[ShokWaveRider]

Of course we understand that we get 8% less pm if you do not delay after FRA. That being said, Break even date is a better metric to use as a decision point.

Assuming PIA is 2000pm ($24k pa) and FRA is 66, so 4 more years left to 70. Delaying till 67 will increase the monthly amount by $160 or $1,920. BUT for that year you will lose $24k by not claiming.

Delaying till 68 you will lose $332.8 pm or $3993.6 but you will lose $48k for the last 2 years that you did not claim.

So it is all relative.

Full Disclosure, I am not taking till 70 Unless ACA for DW rules change, then I will take it at that time.

[jkern]

I plan on taking SS at 62, four months from now. For me, each dollar I get from SS is one dollar that I leave invested. Even a modest return of 3% or 4% pushes the break even point out to early 80's. Any government changes probably push to the break even point even further. Personally, any break even point that is 20+ years out, I'll take the money now.

[Ed B]

My intention is to postpone starting my SoSec year by year. But I do not have long life genetics. My wife does but she is not healthy and is now disabled drawing SSDI with an autoimmune condition that has her on a steroid pump for the rest of her life. This is slmost certainly shortening her life expectancy.

Back to my family history, I recently looked at the lifespans of my ancestors back 4 generations. The longevity record holder is my maternal grandmother who was 80.5. The oldest male ancestor was my 3x great grandfather who was 78 at his passing. My maternal grandfather was 75, father was 72, other great grandfathers were in their 60s. Most of the great Grandmothers lived to the late 60s to mid 70s.

I am healthier now a year after retirement than I have been in over 20 years but I am T2 Diabetic (managed with meds), diagnosed with high BP but managed well with weight lose and meds before the weight loss. I have a coronary calcium score of 900 which eventually led to the discovery of 80% blockage and subsequent stint in the widowmaker artery, which puts me ahead of the killer that got most of the maternal Male relatives going back two generations.

I know that medical advancements and education increase my odds of outliving my Male ancestors but I could set a family record and not reach the actuarial midpoint for men born in 1960.

My stats: 6'6", 245.
A1C </= 6.5 for over two years.
Lipid panel is very good thanks to crestor and changes post retirement.
BP ranges from about 109/60 to the 117/72 range.

[pacergal]

Quote:

Originally Posted by Gulfbeach While there are many good opinions here, every couple or individual can only decide what will work best in their particular situation.

++1