Social Security~ Pays to delay says Scott Burns

[Cb]

Originally Posted by sgeeeee

Yeah. I'm convinced that there is no advantage to making the Social Security benefit call early. The only thing I'm really confident about is that things are likely to look pretty different in 10 years when I reach age 62.

Do you really think so? Looking back over the past 10, 20, 30 years I don't see much of a change having been imposed on those within 10 years of retirement. I think the likelihood of dramatic change for someone already 52 is pretty remote. You're nearly in the 55+ group that seems to be exempted from most of the SS proposals I've seen, and I can't imagine this administration or the next getting anything done before you're 55. They don't call it The Third Rail for nothing.

We're 46 & 47, and to be conservative I reduce our currrent SSA estimates by 75%, plan as though 100% our benefits will be subject to tax, and use a wage-growth escalator of only 2.5%.

Cb

[sgeeeee]

Originally Posted by Cb

Do you really think so? Looking back over the past 10, 20, 30 years I don't see much of a change having been imposed on those within 10 years of retirement. I think the likelihood of dramatic change for someone already 52 is pretty remote. You're nearly in the 55+ group that seems to be exempted from most of the SS proposals I've seen, and I can't imagine this administration or the next getting anything done before you're 55. They don't call it The Third Rail for nothing.

We're 46 & 47, and to be conservative I reduce our currrent SSA estimates by 75%, plan as though 100% our benefits will be subject to tax, and use a wage-growth escalator of only 2.5%.

Cb

I don't think for a minute that social security benefits will go away. But we have seen changes in the benefit COLA calcualtion and the way social security gets taxed. I think we are likely to see more of that. But the other thing that may change for me in the next 10 years is the lifestyle and health of my wife and I. Right now we are both very healthy and spend about 1/3 of our time traveling, camping, doing volunteer archaeology work for various government agencies, etc.

In 10 years, if we are both still healthy & active and Washington has taken some action to secure social security benefits, I think we will be more likely to postpone benefits. This will insure that we receive a larger COLA'd benefit and helps insure against longevity risk.

In 10 years if we have health problems, have slowed down considerably and Washington is overrun with neo-cons who want to eliminate or reduce social security benefits, I think we will be more likely to take anything we can get as fast as we can.

So I see no advantage to deciding today what I am going to choose to do 10 years from now.

[TromboneAl]

What would be nice is a SS-Delay calculator on the web. You puts in your info, including an assumed rate of return on any money you take out as well as tax info, and you gets the expected payments with breakeven points and totals, etc.

Tried a search, but didn't find anything like this.

[Nords]

Originally Posted by sgeeeee

So I see no advantage to deciding today what I am going to choose to do 10 years from now.

I agree, but I appreciate the efforts of all the research ferrets who've identified the issues and helped me refine my thinking on them.

The best thing about this board is being able to explore all the paths without having to do a lot of personal backtracking.

[donheff]

Originally Posted by sgeeeee

doing volunteer archaeology work for various government agencies, etc.

Total hijack - but can you expand on that. It sounds interesting.

[New Thinking]

Why not look at the question of whether to delay SS in terms of SWRs ?

That might be one way to do it. But if you are married and you delay, you could be passing on a much, much larger benefit to your widow down the road. She/He then wouldn't need to take out as much withdrawals. Most are not using this logic in their thinking.

[Cb]

Originally Posted by sgeeeee

I don't think for a minute that social security benefits will go away. But we have seen changes in the benefit COLA calcualtion and the way social security gets taxed. I think we are likely to see more of that. But the other thing that may change for me in the next 10 years is the lifestyle and health of my wife and I. Right now we are both very healthy and spend about 1/3 of our time traveling, camping, doing volunteer archaeology work for various government agencies, etc.

In 10 years, if we are both still healthy & active and Washington has taken some action to secure social security benefits, I think we will be more likely to postpone benefits. This will insure that we receive a larger COLA'd benefit and helps insure against longevity risk.

In 10 years if we have health problems, have slowed down considerably and Washington is overrun with neo-cons who want to eliminate or reduce social security benefits, I think we will be more likely to take anything we can get as fast as we can.

So I see no advantage to deciding today what I am going to choose to do 10 years from now.

Gotcha...the way I interpreted your previous replay was that you thought SS would look dramatically different, not your personal situation.

That's pretty much my M.O....make no decision before you absolutely have to, if even then.

Cb

[REWahoo]

Originally Posted by TromboneAl

What would be nice is a SS-Delay calculator on the web. You puts in your info, including an assumed rate of return on any money you take out as well as tax info, and you gets the expected payments with breakeven points and totals, etc.

Tried a search, but didn't find anything like this.

Agreed. We discussed it here and so far New Thinking is the only poster who says that particular animal exists...

Originally Posted by New Thinking

...I believe that the software we created is the only one in the country that does this all correctly. It gets very complicated as the information for all income needs to be precise. It is not available in a public domain and (as I posted a while back) we use to share the value of our "bridge" product.

Not sure you will recall mention of this software as it was buried in the flame war lively annuity dicussion surrounding the Prudential White Paper thread...

[sgeeeee]

Originally Posted by donheff

Total hijack - but can you expand on that. It sounds interesting.

Hi donheff,

The most accessible government archaeology volunteer program is the Passport In Time (PIT) program -- http://www.passportintime.com/

These programs are run out of the USDA Forest Service. There are opportunities in forests all over the country. Some opportunities involve excavation, some involve survey and mapping, etc. The projects range from historic sites to paleolithic sites.

Many states have archaeology volunteer programs too, but they are all different. In Arizona we have a site steward program and once you get trained, you go visit archaeology sites to monitor vandalism, reduce errosion, post signs, etc.

After you've done this kind of work for long enough, you get to know a lot of archaeologists and find yourself involved in all kinds of projects.

[hogwild]

Originally Posted by TromboneAl

What would be nice is a SS-Delay calculator on the web. You puts in your info, including an assumed rate of return on any money you take out as well as tax info, and you gets the expected payments with breakeven points and totals, etc.

Tried a search, but didn't find anything like this.

This site has a free SS-delay calculator:

http://www.analyzenow.com/

[Gail]

Originally Posted by hogwild

This site has a free SS-delay calculator:

http://www.analyzenow.com/

Our plan has always been to take SS at age 62. I finally took the time to use this calculator, and I was a little surprised, but definitely pleased, that our best alternative was taking it early.

[OAG]

Just a update on the SS "do-over" process. I submitted a letter and form SSA-521 to withdraw my 2002 application for SS benefits. I had taken SS at age 62 and now see that I have sufficient funds to just repay SS and stop current benefits. Then I will wait until I need the funds or age 70 whichever happens first.

After submitting the application in Sep 07 I got a call from SS in Chicago asking if I knew what I was doing. After a long discussion the SS representative said she thought I knew what I was doing however, she suggested I go into a local office (Ohio) and discuss it with a SS representative. I made the appointment, waited about a month and went in today. Sat down with the local Rep who had no idea why I was there. We talked about it, she call her Chicago SS office, and said the application was being "worked" and I should anticipate a response along about January. She said the response letter will give me a dollar amount to send them and provide a provision for sending in my monthly Medicare premiums. At that point all I have to do is send in the dollars and my application will be basically like I had never submitted it. I anticipate the payback will be approximately $80K plus past Medicare Premiums.

So I guess you can take the benefit at 62, change your mind, pay the money back (interest free), take the tax deduction for the repaid money, and submit a new application for SS when your ready to do so.

[REWahoo]

Originally Posted by R Wood

So I guess you can take the benefit at 62, change your mind, pay the money back (interest free), take the tax deduction for the repaid money, and submit a new application for SS when your ready to do so.

After all the discussion of the ability to request and be granted a SS "do over', it's really nice to get a first hand account of the real thing. I had doubts that it was possible to do this unless you had extenuating circumstances, but that doesn't look to be the case.

Thanks R Wood for posting your experience. Please let us know when you get the January letter so we can close the loop on this.

[Nords]

Originally Posted by REWahoo

After all the discussion of the ability to request and be granted a SS "do over', it's really nice to get a first hand account of the real thing. I had doubts that it was possible to do this unless you had extenuating circumstances, but that doesn't look to be the case.

I find it hard to believe that this "do-over benefit" will still be around in 2022...

[MJ]

Originally Posted by R Wood

J
So I guess you can take the benefit at 62, change your mind, pay the money back (interest free), take the tax deduction for the repaid money, and submit a new application for SS when your ready to do so.

Can I assume that if your income is less than the returned money that you will be able to use the leftover credit the following year. Does your state have a form line to use the credit as well?

MJ

[clifp]

Originally Posted by REWahoo

After all the discussion of the ability to request and be granted a SS "do over', it's really nice to get a first hand account of the real thing. I had doubts that it was possible to do this unless you had extenuating circumstances, but that doesn't look to be the case.

Thanks R Wood for posting your experience. Please let us know when you get the January letter so we can close the loop on this.

A big Mahalo for posting your experiences. I am personally in Nords camp earliest SS for me is 2022 and wouldn't even hazard a guess what rules exist then. However my BIL just retired (for the 3rd time LOL) at 66, My sister is 9 years younger and in great health. Financially they are probably in a position to repay the SS at age 70 and I've discussed it with him.

Knowing that it is actually possible to do what the financial gurus says you should do is very helpful. Judging by your experience with the folks at SS office, I am guessing this isn't an everyday affair!

[ziggy29]

As mentioned, if you do not need the money at 62, you can still collect it at that age, set it aside in an interest-bearing account, and give it all back at a later date in exchange for larger monthly checks. At least as long as this loophole exists, anyway.

There's something to be said for waiting for larger checks when you don't need it, but there's also something to be said for the bird in the hand. Taking it at 62 and setting it aside would seem to leave both options open. If you're healthy a few years later, it might be worth giving it back and starting over with a higher payout. I don't expect this option to be available in 20 years when I'm faced with it, though, as is typical for my generation and those after me.

[Alan]

Originally Posted by ziggy29

As mentioned, if you do not need the money at 62, you can still collect it at that age, set it aside in an interest-bearing account, and give it all back at a later date in exchange for larger monthly checks. At least as long as this loophole exists, anyway.

There's something to be said for waiting for larger checks when you don't need it, but there's also something to be said for the bird in the hand. Taking it at 62 and setting it aside would seem to leave both options open. If you're healthy a few years later, it might be worth giving it back and starting over with a higher payout. I don't expect this option to be available in 20 years when I'm faced with it, though, as is typical for my generation and those after me.

Have to agree - a very attractive loophole indeed. I hope I can remember to look for this in 9 years when the time comes for me to make the decision