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Old 07-16-2015, 06:18 PM   #21
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I look at it as how much do I really need? Once I meet some amount of SS + expected investment returns that beats my lifestyle requirements (with my personal buffer), I'm taking it. That said, even though all of my numbers say I can take it now and have a better lifestyle than I have for the last 60 years, I'll probably still delay until FRA to provide some "extra" spousal benefit. Delaying SS past my needs is futile IMO. YMMV.
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Old 07-16-2015, 07:08 PM   #22
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Interesting to see how this has changed over the years. After spending 9 years on "what we had", taking Social Security at age 62 in 1998 kept us going, and being under the tax brackets allowed us to keep on keeping on. CD rates were still in the 6% range, so overall, it worked out well.
A little bit off the SS subject, but planning in the early 1990's was different from today. FDIC insured CD's paid as high as 11%. It was one of the factors that made us so conservative. Certainly, we would have made more by investing, but the safety factor was comforting.

Have never gone back to see how much more we might have been getting from SS today, had we waited, but current amount for DW and I... she, receiving 1/2 of mine... is $25,000/yr. Have been receiving SS for 17+ years, and thankful for that.
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Old 07-17-2015, 11:29 AM   #23
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Originally Posted by imoldernu View Post
Interesting to see how this has changed over the years. After spending 9 years on "what we had", taking Social Security at age 62 in 1998 kept us going, and being under the tax brackets allowed us to keep on keeping on. CD rates were still in the 6% range, so overall, it worked out well.
A little bit off the SS subject, but planning in the early 1990's was different from today. FDIC insured CD's paid as high as 11%. It was one of the factors that made us so conservative. Certainly, we would have made more by investing, but the safety factor was comforting.

Have never gone back to see how much more we might have been getting from SS today, had we waited, but current amount for DW and I... she, receiving 1/2 of mine... is $25,000/yr. Have been receiving SS for 17+ years, and thankful for that.
+++1 for us "old" folks. DW took hers early for almost 15 years. I only the past almost 8 years (took it the last time at 67.5 years old). We learned the safety of CD's (and decent returns) though the 70s, 80s, 90s and even part of the 2000s and were debt free since the mid 80's (homes and cars purchased for cash).
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Old 07-17-2015, 11:48 AM   #24
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I look at it as how much do I really need? Once I meet some amount of SS + expected investment returns that beats my lifestyle requirements (with my personal buffer), I'm taking it. That said, even though all of my numbers say I can take it now and have a better lifestyle than I have for the last 60 years, I'll probably still delay until FRA to provide some "extra" spousal benefit. Delaying SS past my needs is futile IMO. YMMV.
This is interesting because even in the most dire scenarios all calculators show I'll die with way too much $--and that's with all kinds of contingencies and buffers. Having only FIRE'd in the last two months, what's really surprised me is my psychological adjustment to not having income coming in. I've even effectively worked OMY by deciding to not spend $ that was earmarked for remodeling, thereby funding the rest of this year.

I only recently found this blog of a woman who blogged about her financial fears just before and after retiring, and a lot of her thoughts I've been able to relate to:

Thoughts from a Bag Lady In Waiting: January 2010

I point all of this out because one valuable aspect of delaying SS that I don't see too often in the discussion is psychological in nature. For me, delaying SS is an integral part of my SWAN PF/financial picture. YMMV because I have been and probably always will be financially conservative in nature.
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Old 07-17-2015, 03:24 PM   #25
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I point all of this out because one valuable aspect of delaying SS that I don't see too often in the discussion is psychological in nature. For me, delaying SS is an integral part of my SWAN PF/financial picture. YMMV because I have been and probably always will be financially conservative in nature.
In addition to my specific reasons for delaying SS to 70, I too think of it in psychological terms. It just feels better knowing that it is still out there when I want/need it. I know my monthly benefit is growing every month I do not take it. As a former scientist, I look at SS as "potential energy" vs "kinetic energy" at this point. YMMV
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Old 07-17-2015, 03:40 PM   #26
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From the analysis I present below, it's beneficial to wait from age 69 to age 70, especially if a low interest rate environment prevails at the time of making the decision to delay.

SS benefits were intended to be actuarially neutral. However, in practice, the intended neutrality may or may not be achieved, depending upon currently prevailing real interest rates.

The determination of when to take benefits with the 62-70 age range depends on two main variables: (1) whether you think your life expectancy is greater or less than the generally stated life expectancy for your age and gender; and (2) the real interest rate at the time you make the decision to delay for another year (or shorter period).

Two resources are needed to determine whether it's actuarially beneficial to delay taking benefits: (a) the changes in monthly payouts with age; and (b) the social security actuarial life table, both of which I've linked to below:
Early or delayed retirement
Actuarial Life Table

I'll provide one example using male life expectancy from the actuarial table for a person born in 1960. In theory, hundreds of calculations could be made since the SS benefit amount increases in one-month or two-month periods - one is not limited to waiting a whole year to get a benefit increase.

I will use generic units. These can be readily scaled to actual dollars.
At age 69, the monthly benefit is 124, and at age 70 is 132.
The life expectancies for this person are: (a) 14.4 at age 69 and (b) 13.73 at age 70.
These data help provide the total expected benefit amounts according to the following:
Age 69: 124*14.4 = 1785.6
Age 70: 132*13.73 = 1812.36
Thus the mean expected lifetime SS benefit at age 70 is about 1.5% greater than at age 69.

Does that mean one should necessarily wait until age 70? It depends.
The prevalence of low real interest rates (which is our current situation), shifts the decision towards delaying taking benefits.
Moreover, a belief that your life expectancy is greater than the mean also shifts the decision toward waiting.
Another factor is the balance of concerns between taking benefits early or late.

Even assuming one's life expectancy exactly matched the mean, and that current real interest rates were 1.5%, thereby making the benefits at age 69 and 70 actuarially equal, there is still an argument in favor of waiting.
Specifically, if you take benefits at 70 and unexpectedly become ill at 75, at worst you could lie in bed and ponder what additional fun you might have had between 62 and 75 had you taken benefits earlier.
On the other side of things, if you live to be 85 and beyond, and have to live on a reduced income, you will regret having taken benefits early, over an extended period.
Thus, I expect to wait until age 70 to take benefits and would need a very good reason to do otherwise.
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Old 07-17-2015, 05:50 PM   #27
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I'm retired and DH plans to retire from USPS next May. He and I are the same age and still a few years from having to make the SS decision. However, DH plans to take SS at 62. He is convinced he will have a shortened life span due to Ventricular Tachycardia (just had his ICD upgraded with pacemaker capability). My SS payout will be larger than his due to my higher salary for most of our careers. I will most likely take a wait and see attitude regarding taking it at 62, FRA or 70. He would like me to take it at 62 even though we won't need it. We have been frugal our entire lives and he is ready to loosen the purse strings.
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Old 07-17-2015, 05:57 PM   #28
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What is amusing to me is that when discussing retirement plans for our portfolios, most folks plan out to age 100 at a minimum. Some here even pad that to age 115 (because all the advances of modern medicine and just to be safe).............

When discussing delaying S.S. to age 70.... Suddenly living to age 83 to 'Break-even' seems almost an insurmountable feat!

I am still laughing!
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Old 07-17-2015, 06:11 PM   #29
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What is amusing to me is that when discussing retirement plans for our portfolios, most folks plan out to age 100 at a minimum. Some here even pad that to age 115 (because all the advances of modern medicine and just to be safe).............
I'm not. Age 95 max, and that's only because of the historical and present exceptional state of my health. The live to be 100 horse has been discussed and beaten to death elsewhere. The "advances in modern medicine" argument has been addressed as well (spoiler alert: not going to happen in the lifetime of anyone from the Boomer generation, and probably not for anyone from Gen X).

Are those planning to live to age 100 the same ones who said they'd work "til I drop", only to find reality is quite the opposite? Looking at all statistics, few will live to be 100. Given that 2/3 of Americans are overweight, with 1/3 (on it's way to 40%), given the eating and exercise habits of the majority of Americans, I have serious doubts of anything beyond 1-2% will be living to be 100. As to age 115..really??
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Old 07-17-2015, 08:00 PM   #30
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Two resources are needed to determine whether it's actuarially beneficial to delay taking benefits: (a) the changes in monthly payouts with age; and (b) the social security actuarial life table, both of which I've linked to below:
Early or delayed retirement
Actuarial Life Table
I wouldn't use that life table for this analysis.
If you want to stick with something from SS, I'd suggest this: Retirement & Survivors Benefits: Life Expectancy Calculator
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Old 07-18-2015, 01:17 PM   #31
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I wouldn't use that life table for this analysis.
If you want to stick with something from SS, I'd suggest this: Retirement & Survivors Benefits: Life Expectancy Calculator
The trouble with that kind of calculator is that it does not know my actual DOD, making an accurate calculation impossible.
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Old 07-18-2015, 01:41 PM   #32
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From the analysis I present below, it's beneficial to wait from age 69 to age 70, especially if a low interest rate environment prevails at the time of making the decision to delay.
...
These data help provide the total expected benefit amounts according to the following:
Age 69: 124*14.4 = 1785.6
Age 70: 132*13.73 = 1812.36
Thus the mean expected lifetime SS benefit at age 70 is about 1.5% greater than at age 69.
From independent's link:
@69: $124 * 16.2 = $2008.80
@70: $132 * 15.6 = $2059.20
So the expected additional lifetime benefit is about 2.5% greater.

But here's what this analysis fails to consider:
1) That 2.5% is spread over ~16 years. So the additional benefit is about 0.16% per year. Whoop-dee-doo.

2) To collect the additional $8/yr (132 - 124) you have to give up $124.
This is the infamous "break even analysis". The first 15.5 ($124/$8) payments you get are just being taken out of that $124 you gave up. The first 15.5 years you are just getting your own money back.

You are behind for 15.5 years and only pull ahead after that. But on average you'll die in 15.6 years -- so just as you get back to even, you die.

There's nothing special about getting your own money back. What's special is after you've gotten all your own money back and then start getting *their* money. And the only way that happens is if you live longer than your life expectancy. Half the people will and half the people won't. But we all assume that we will, what with this being Lake Wobegone and all.

That's the whole reason this debate is never-ending.
Some people look at the 15.5 year breakeven period and say it's too long to be acceptable. Others don't care about that but care about having that extra $8 should they live into their 90's.
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Old 07-18-2015, 02:08 PM   #33
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The trouble with that kind of calculator is that it does not know my actual DOD, making an accurate calculation impossible.
That has never counted as a fatal flaw for any life actuary. This is in part what actuarial science is about.

Ha
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Old 07-18-2015, 02:17 PM   #34
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Have never gone back to see how much more we might have been getting from SS today, had we waited, but current amount for DW and I... she, receiving 1/2 of mine... is $25,000/yr. Have been receiving SS for 17+ years, and thankful for that.
I presume you're thankful for living 17+ years to be able to take SS that long, but you may not have gotten a good return on your & your employer's contributions to SS.
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Old 07-18-2015, 02:19 PM   #35
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The determination of when to take benefits with the 62-70 age range depends on two main variables: (1) whether you think your life expectancy is greater or less than the generally stated life expectancy for your age and gender; and (2) the real interest rate at the time you make the decision to delay for another year (or shorter period).
How does this take into account the survivor benefits if married? Thanks.
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Old 07-18-2015, 06:58 PM   #36
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Since I expect this thread is ending its normal lifespan, I'll take a moment to make one more point... promped by gerntz's comment.

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I presume you're thankful for living 17+ years to be able to take SS that long, but you may not have gotten a good return on your & your employer's contributions to SS.
As I'm not so good at math, I wondered just how this would all wok out, if basic calculations were carried out.

This site covers the maximum SS taxable salary tables from the initiation of SS to date.
The Evolution of Social Security's Taxable Maximum

While this would normally be a one glance and gone project, when I looked at the max tax table below, I was amazed to find that the maximum taxable salary dollars by year, tracked my own salary history so closely that it could have been written for me. Honest!!!... the max tax dollars for the years 1959 to my retirement year in 1989 (30 years) tracked my actual salary growth during that period dollar for dollar... almost to a "T".

In other words, for my working years after college, to my retirement in 1989, I always paid the maximum allowed by law. If I were smart enough to figure this out, I could answer the question of whether or not I had gotten my money's worth out of SS. A perfect test case.

The current $25,000/yr SS income is for my self and DW taken at age 62, (hers being calculated at half of mine, as a SAHM)... though she paid in, it did not reach the 50% threshold.
Attached Images
File Type: jpg Tax Max chart.jpg (63.7 KB, 39 views)
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Old 07-18-2015, 08:10 PM   #37
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Okay... one more hit at this...
Curiosity got the best of me and I decided to see how much I had paid in, over 31 working years. I checked the OASDI rates and max pay-in for the years 1958 thru 1989 and came up with these calculated numbers, and the total of the actual dollars for each year.
Calculated from here:
http://www.taxpolicycenter.org/taxfa...historical.pdf

All of this really means nothing important, because inflation is not involved in the actual numbers.

Quote:
$$$ Year
189 58
240 59
288 60
288 61
300 62
348 63
348 64
348 65
508 66
508 67
585 67
593 69
655 70
655 71
717 72
1047 73
1306 74
1395 75
1514 76
1633 77
1787 78
2331 79
2636 80
3177 81
3499 82
3855 83
4309 84
4514 85
4993 86
5490 87
5856 88
6361 89

$61395.00 total paid in to SS
from 1958 to 1989

Total Max SS payments
at SS tax rate.
Now, back to my own numbers of money collected since we took SS in 1998. I think our first our first SS annual income was about $17,000, and today we receive $25,000 per year.

Even considering that our payments in, were just our half of the total amount, the annual amount that we receive seems high, considering the initial "investment".

Bottom line... for the total of $63K invested over the working years, we have already received about $360K in benefits. In the first three years, from age 62 to age 65, we collected about $50K.

Numbers is funny....
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Old 07-18-2015, 08:37 PM   #38
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I presume you're thankful for living 17+ years to be able to take SS that long, but you may not have gotten a good return on your & your employer's contributions to SS.
Or he may have gotten a great return!
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Old 07-18-2015, 11:27 PM   #39
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imoldernu, if you get your SSA statement it should tell you exactly how much you paid in.

That is, if they keep records that long...

Those old stone tablet records were very heavy but they keep quite well I hear...
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Old 07-19-2015, 12:09 AM   #40
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imoldernu, if you get your SSA statement it should tell you exactly how much you paid in.

That is, if they keep records that long...

Those old stone tablet records were very heavy but they keep quite well I hear...
Right... Ya got me!
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