S.S .& the single forum members

[guest]

Ah ha! - early SS, bacon and and and Viagra! - like the old pharts on the tv ads.

Whoopeee!

heh heh heh -

they're old?

mmmmmmmm, bacon!

 

[Moemg]

Since I started the thread I thought I should state what I'm going to do . I'm waiting until 66 to claim my SS because I already started collecting a SS survivor benefit and will swith to my benefit which is 60% higher at 66 . If I was not collecting that I would have started at 62 because I've seen there are no guaranties with life so as Uncle Mick says Party till you puke .

 

[REWahoo]

they're old?

I had the same reaction. I always thought they were of average age and had the misfortune of suffering from early onset dysfunctionality...

 

[unclemick]

I had the same reaction. I always thought they were of average age and had the misfortune of suffering from early onset dysfunctionality...

Nah - great makeup!



heh heh heh - not to mention good camera work. I'm an optimist - thinking ahead of running down those young 65 yr old nurses aid's with my hoverround when I'm 85!

 

[Moemg]

Nah - great makeup!



heh heh heh - not to mention good camera work. I'm an optimist - thinking ahead of running down those young 65 yr old nurses aid's with my hoverround when I'm 85!

My grandfather kept wanting to play strip poker with his private nurses .

 

[Independent]

Thats pretty much correct. It matters a lot if you're entering an underfunded retirement, usually because you're suddenly unable to work any longer.

If you're 62 and have only enough money to make it to 70, you'd probably want to hold off on the SS until you're 70, providing you can then live the rest of your life on that amount. Still, it might be smart to take it earlier and try to hold onto at least a nugget of your nest egg.

For someone with a 7 figure portfolio at the age of 62, I doubt the couple of hundred bucks a month one way or the other will matter.

I just hope its still there in 15 years when I get there. I'm going to take it and blow it, each and every month. Pure fun money.

I think CFB is pretty accurate here. But I'll put it in my own words anyway. Deferring SS (like buying a private annuity) amounts to buying longevity insurance. The thing you are trying to insure against is "outliving your assets". This can happen due to a combination of poor investment returns and long life.

High wealth people don't need to worry about this. They can afford to self-insure, simply planning to reduce spending if necessary. Lower wealth people do need to worry, because "reduce spending" means going below some floor.

It's equivalent to saying that a twenty-something may rationally choose a collision deductible of $250 on his $10,000 car because he can't afford to be without the car and he doesn't have the emergency fund to cover a higher deductible. While at the same time his parents, who have significant savings, don't even bother to carry collision coverage on their $10,000 second car.

 

[New Thinking]

Retiring Earlier

The reason someone might be willing to delay SS is so they can likely retire earlier using this strategy. As we have discussed before, creating larger amounts of retirement income in the form of SS will often significantly reduce the amount of taxes paid over the course of a retirement. And since one is risk-pooling with SS, an individual also needs to save less if they are maximizing their SS benefit. Therefore, between the larger after-tax income and risk-pooling (tradeoff), the majority of individuals willing to delay SS can retire earlier since a smaller nest egg is required. They just use their savings first and delay SS to a later age, such as age 70.

 

[cute fuzzy bunny]

On the other hand, taking social security early can help one retire earlier by introducing an income stream that handily offsets the need for a larger portfolio, using SS first and deferring their savings to a later age. This also reduces taxes.

That is of course if one is close enough to 62 to be fairly sure you're going to actually get it.

Do your firecalc runs with it at 62 and again at 70. You'll usually get higher withdrawal rates, better success percentages, and possibly lower initial principal values using 62. Lower initial principal value means an earlier retirement.

Nothing magical about it being SS or the age you take it at. Its simply that the injection of any income stream into an ER plan produces these results.

It may even help create the scenario where you can live comfortably on your combined early SS payments and your available dividends and interest. In that case, portfolio volatility becomes rather disinteresting.

Just shows you that you can skew this argument any way you like to suit your predetermined answer.

 

[2B]

On the other hand, taking social security early can help one retire earlier by introducing an income stream that handily offsets the need for a larger portfolio, using SS first and deferring their savings to a later age. This also reduces taxes.

This is true with any annuity. Even one of the "buy at 55" SPIAs that I hope we have discredited will give a higher SWR in FIRECalc than depending on the assets to spin off cash flow. The difference is the time frame (usually 30 years) and the inflation adjusted SWR for a 60/40 portfolio of around 4%.

The key always comes down to how long you will actually live and what will the net/after inflation performance of your assets really be. Going out more than 30 years eliminates on of the great market disasters (the 1970's) and almost always gives a higher SWR than at 30. As for investment returns, I have no way of predicting.

Delaying SS only makes sense if you are one of the "immortals" that gets into their late 80's or beyond or you have a spouse that will significantly outlive you. I don't have a way of accurately predicting this for anyone either.

If DW went away, I'd probably jump on SS at 62.

If you are leaning toward an annuity, there isn't a better buy on the market than delaying SS until as late as possible.

 

[haha]

Going out more than 30 years eliminates on of the great market disasters (the 1970's) and almost always gives a higher SWR than at 30. As for investment returns, I have no way of predicting.

Since this is a nonsensical result, if it is true it can only indicate that Firecalc while fun for obsessives is not what one should hang his hat on.

Ha

 

[Zoocat]

The other key if you delay is hoping the govt doesnt start doing means testing, cuts the payout, drops the inflation adjustment, increases the taxation or some other method of pumping the bilge before the ship sinks.

If you take the money and invest it rationally, you'll be in your early to mid 80's before the delay strategy starts getting the upper hand. Having that bird in the hand may let you be a little freer with your spending between 62 and 85.

I'm guessing that the money is going to be more fun to spend at 62 than 85.

This is my plan for my measley SS payout of $400/month at 62. If I don't need it then I will invest it for later use or to leave as part of my inheritance for my oldest son who will likely need it when SS goes bankrupt.

 

[growing_older]

I can see where people are using SS for different things so will have different strategies. I'm thinking of it as longevity insurance. At some point I will retire and live off savings - and likely show pretty low income for some years. I plan to use that time to convert IRA money to Roth using the lower tax brackets. Delaying SS at least until I'm done with those conversions seems like a good idea. After that, I like the COLA of SS as longevity insurance in case I miss estimated savings or live longer than expected. In between I see terrible political risk and don't see any way to know what is the best thing to do. Taking SS before 70, then paying back to get the higher payout seems like a good idea but vulnerable to having that "feature" eliminated - not so much because of usage (only a few actually do that) but because it's getting all kinds of press and might be seen as a 'loophole" for the rich. Alternatively, waiting to take the higher payout might mean missing any grandfather provision if general SS means testing is passed, which seems to be gaining political momentum and I expect to happen sometime in my lifetime.

It's hard to optimize a strategy in a game where someone else gets to change the rules whenever they like.

 

[REWahoo]

Alternatively, waiting to take the higher payout might mean missing any grandfather provision if general SS means testing is passed, which seems to be gaining political momentum and I expect to happen sometime in my lifetime.

It's hard to optimize a strategy in a game where someone else gets to change the rules whenever they like.

I see little if any risk of being impacted by this once you are actually at an age to be able to make a decision to delay taking SS to get a higher payout.

Until age 62 the delay strategy is a theory, not an actual decision. And once you reach 62 you will have plenty of time to take action if you see a means testing law is about to be passed.

 

[cute fuzzy bunny]

It's hard to optimize a strategy in a game where someone else gets to change the rules whenever they like.

Thats why I worry less about spot on optimized strategies with so many variables that the 'optimization' will most likely fail, and just go with the strategy that has almost no variables.

 

[cute fuzzy bunny]

I see little if any risk of being impacted by this once you are actually at an age to be able to make a decision to delay taking SS to get a higher payout.

Until age 62 the delay strategy is a theory, not an actual decision. And once you reach 62 you will have plenty of time to take action if you see a means testing law is about to be passed.

Unless you're in your mid to late 50's and almost certain to receive 100% of the benefits as stated, largely without modification. Incorporating the availability of an income stream starting at 62 may allow you to spend more money NOW in your 50's.

Pretty appealing to someone who would like to spend a little more while they're young.

Its kinda funny to hear people say "I just hunkered over a bunch of spreadsheets and calculators and came to the conclusion that I should defer income until I'm old and deny myself whatever pleasures I may have gotten from it, just to make sure to mitigate the 2% chance I'll outlive my money."

Is that what we've traded our working lives for?

I'd rather work another year or two, or come up with an alternative plan for the slim chance that I live too long.

 

[REWahoo]

Unless you're in your mid to late 50's and almost certain to receive 100% of the benefits as stated, largely without modification. Incorporating the availability of an income stream starting at 62 may allow you to spend more money NOW in your 50's.

Pretty appealing to someone who would like to spend a little more while they're young.

Its kinda funny to hear people say "I just hunkered over a bunch of spreadsheets and calculators and came to the conclusion that I should defer income until I'm old and deny myself whatever pleasures I may have gotten from it, just to make sure to mitigate the 2% chance I'll outlive my money."

Is that what we've traded our working lives for?

I'd rather work another year or two, or come up with an alternative plan for the slim chance that I live too long.

Everyone should gaze at their own belly button and contemplate a personal 'when to take SS' decision.

The point of my post was once you get to SS age there should be ample warning of changes that will impact you - such as means testing. With the possible exception of doing away with the payback and restart option, there should be no "gotchas" once you reach your 60's.

 

[cute fuzzy bunny]

But havent there been a a number of changes throughout the years? Changes to the COLA adjustments and changes to the taxation rules? Wouldnt you expect there to be many more as the balance of workers to retirees changes drastically over the next 15 years?

Heck, over the last ten years havent rising medicare costs eaten up the COLA entirely, and then some?

 

[REWahoo]

But havent there been a a number of changes throughout the years? Changes to the COLA adjustments and changes to the taxation rules? Wouldnt you expect there to be many more as the balance of workers to retirees changes drastically over the next 15 years?

Heck, over the last ten years havent rising medicare costs eaten up the COLA entirely, and then some?

Yes to all the above. Things will definitely change with regard to SS.

Growing_older expressed concern about missing out on a grandfather provision regarding means testing. My response was that it was unlikely those of us who were at or near SS age would be deprived of such an opportunity since we should know in advance of pending legislation.

 

[growing_older]

For what it's worth, I mentioned the idea of a grandfather provision in means testing simply as a hypothetical example. Likewise the possibility that the return of SS taken and refiling might be withdrawn in the future. But the issue isn't limited to these specific examples. My thought was that SS will be tinkered with, perhaps in these ways, but certainly in other ways too. Impossible to know what rule changes might be coming or when.

 

[REWahoo]

OK. Never mind....