SS at 62 or 70?

[joeea]

Quote:

Originally Posted by pb4uski I look at it a little differently. From 62 on I have an option to start SS. If investment results continue to be decent then I'll ride on them and take advantage of the opportunity to buy inflation adjusted longevity insurance on the cheap, if investment results lag then I'll start SS and ride out the storm.

That's basically my feeling as well.

For those of us not riding close to the edge financially, it's less likely that a storm would force us to start claiming social security benefits. But even then, we always have the option should the need arise.

And if it doesn't we have some terrific longevity insurance being built up.

[REWahoo]

Quote:

Originally Posted by pb4uski But then once you reach FRA you always have the option to suspend benefits and get the original flexibility back.

I'm so past FRA I can't even see it in my rear view mirror.

[Bir48die]

Quote:

Originally Posted by pb4uski I look at it a little differently. From 62 on I have an option to start SS. If investment results continue to be decent then I'll ride on them and take advantage of the opportunity to buy inflation adjusted longevity insurance on the cheap, if investment results lag then I'll start SS and ride out the storm.

+1

So after reading a number of SS threads I thought I would go back and do some calculations. We all know under their assumption that we work until retirement. So, I put in my earnings history and zeroed out the 4 1/2 years till I hit 66.2. The first was how much I lose by not working right up until retirement and it's about $120/month. No big deal.

So I started inputting 63.2 year, 64.2 years, etc to see the yearly difference. So it showed the following monthly increases by year:

+$128 (63.2)
+$169
+$152
+$171
+$51 (67.2)
+$205
+$205
+$228

Total is $1,431 from 66.2 to 70 which doesn't jive with $1,309 showed above. Obviously a glitch and ran it several times but weird anyway. So assume 66-67 years will adjust up more than $51.

My goal is to stay out until FRA but I am one that's in the camp of if we have an apocalyptic event I will pull the trigger earlier.

[RunningBum]

Quote:

Originally Posted by euro Quote: 5) If I'm lucky enough to live to 'break even' I will be thrilled to be 'losing money' at that point. #5 is what clinches it for me too! Not entirely scientific but good enough for me

Funny, I always think just the opposite. If I die before the 'break even', I really doubt I'll care that I didn't start early. I just can't imagine that if I'm on my death bed at 75, I'll be gleefully saying "Take that, SSA! I won!" But if I do live longer, I'll be thrilled to be still living, and also to have a larger check every month.

Deferring is only my default plan. Like some of the others on here, if the market does lag quite a bit while I'm between 62 & 70, I'm very likely to start taking SS then to keep more of my money in the market during the recovery.

[joeea]

Quote:

Originally Posted by RunningBum Funny, I always think just the opposite. If I die before the 'break even', I really doubt I'll care that I didn't start early. I just can't imagine that if I'm on my death bed at 75, I'll be gleefully saying "Take that, SSA! I won!" But if I do live longer, I'll be thrilled to be still living, and also to have a larger check every month. Deferring is only my default plan. Like some of the others on here, if the market does lag quite a bit while I'm between 62 & 70, I'm very likely to start taking SS then to keep more of my money in the market during the recovery.

LOL!

The good news is that almost everyone is happy with whatever choice they make regarding when to start collecting - early or late.

I know lots of folks who started at 62 and are very pleased. I know some who started at 65 and are very pleased. I know a few who started at 70 and are very pleased.

I supposed it's a bit of confirmation bias. Still unless you are financially close to the edge, it's usually a choice between "good" and "gooder".

The only folks I know who aren't pleased are the very few that have run out of money at an older age. They wish they had more money coming in and wish they didn't have to be a burden on their family (although they don't typically see how they could have managed to make that happen).

[flyingaway]

In all the calculations, did you assume working from 62 to 67? I think that may make a difference.

[daylatedollarshort]

My thoughts are there is more SS money after around age 84 or so but less chance of living long enough to collect it for myself or my heirs. We'll be living below our means with SS at 62, pensions at 55 and without downsizing, so for us longevity insurance is not a priority. The current plan for our circumstances is to claim at 62.

[xdafly]

Couple links that may be known to all
SSAnalyze - Bedrock Capital Management

Larry Kotlikoff interview by James Lange (there is a mp3 version also)
The Secrets to Maxing Out Your Social Security

For a couple that uses the file and suspend plus the section on husband dying at 70 without ever having collected, then full benefits being paid to wife (now widow) makes for some good thinking points.

Finally, the BH Wiki on related topic
https://www.bogleheads.org/wiki/Taxa...urity_benefits

Due to how combined income and SS may be taxed, based on 2017 rules, it takes quite a few strategies and modeling to come up with a best case or a few optional best cases.

[marko]

Quote:

Originally Posted by euro #5 is what clinches it for me too! Not entirely scientific but good enough for me

If I may add #6 to my previous post:
6) You never know when the rules might change. Take the money and run!

[Fedup]

I think you have to plan SS as a couple. I mean milk the system to your best advantage. That sounds bad but at least I'm honest. My husband started at 64.50, which allows him to retire at 64.50 and not waiting until FRA, I'm a lot younger, so it will be a while before I get to it. But I decide to wait until I'm 70 because I'm planning to use it as long term care insurance. I'm planning 6-fiugure LTC after age 80. The money will be there to cover this. If something happens to my husband and I'm at least 60, I will get survivor's SS. The only problem is if I'm younger than 60. Hence I keep the life insurance until then. All this so we don't have to touch our retirement money. Also the one thing that makes a difference is conversion to Roth before RMD. That throws the tax situation out of whack too. I rely on Turbotax for this. So when I get closer to my FRA, I will recalculate again to see what makes sense. Even if I want to take it early, I might have to give it all back.

[REWahoo]

Quote:

Originally Posted by Fedup I think you have to plan SS as a couple. I mean milk the system to your best advantage.

NO! No! No! That is so wrong...

What you need to do is jointly strategize so that you maximize your benefits as a couple. No need to milk the system.

[nun]

When I did the calculation the break even point was 83. As I don't need the longevity insurance of delaying SS until 70.5 my plan is to take it at 62.

[Ronstar]

Quote:

Originally Posted by flyingaway In all the calculations, did you assume working from 62 to 67? I think that may make a difference.

I didn't assume working from 62 to 67 in the calcs. And I don't expect to work between 62 and 67. I believe that ss benefits are calc'd from the best 35 years of income. I have that covered, so I don't think my benefits would change much even if I did go back to work.

[Clone]

Quote:

Originally Posted by Ronstar I believe that ss benefits are calc'd from the best 35 years of income. I have that covered, so I don't think my benefits would change much even if I did go back to work.

I have 35 strong years of earnings. I did the calculation to see what the impact would be if I earned the maximum for one more year. The monthly benefit at FRA would increase something like $10 per month.

We have some self employment income. That is all in my wife's name as she has a few zero years in her calculations.

[kimcdougc]

DH plans to get his at 62. I plan to wait and see whats going on when my 62nd birthday rolls around in 5 years.

[Clone]

Quote:

Originally Posted by joeea The good news is that almost everyone is happy with whatever choice they make regarding when to start collecting - early or late.

My wife's parents would grouse about how a friend of theirs had talked them into taking Social Security at age 62. And how they would have had larger payments if they had waited.

They conveniently ignored that they were on the edge of being broke, and that the SS gave them a stable income to live on. They both died well before the breakeven point, such that it was the correct thing to do from the 'looking backwards' perspective. Monetarily, they did not really have a choice.

Much of the reason for the debate on this board is related to the apparent financial conditions where most folks here have the choice. Most likely, DW will take hers at 62. I will probably delay until at least FRA, if not 70. That provides a longevity hedge and an inflation hedge. If I croak early, she will benefit from the larger survivor benefit.

The reality is that we probably can not make a bad decision on when to take it. There may be a slight change in the total left to our heirs, but that is of minimal concern to us when we are no longer converting oxygen to CO2.

[Bestwifeever]

We split the difference and took it at our respective FRAs.

[CardsFan]

Quote:

Originally Posted by Clone I have 35 strong years of earnings. I did the calculation to see what the impact would be if I earned the maximum for one more year. The monthly benefit at FRA would increase something like $10 per month.

I made the same calculations and got similar results. It's funny, though, when you tell someone that and they think you're crazy. Most people have no idea how SS is calculated.

As for when to take it, I'm in the "split the difference" crowd and planning on FRA. I have tried the Bedrock calculator, and it is pretty good to run scenarios, but the dang thing won't tell us when we are going to leave this planet.

[Lawrencewendall]

I originally planned to take SS at 62 (break-even was 76 at 67 or 78 at 70). Instead, I plan to postpone SS so I can pull from my 401(k) just keeping myself in the 15% bracket and rolling it into a ROTH. That will take me up to FRA. Each year I don't touch SS is a 8% raise. Sure beats the average market return.

[RunningBum]

Quote:

Originally Posted by marko If I may add #6 to my previous post: 6) You never know when the rules might change. Take the money and run!

I can't/won't argue with that one. The logic in me says that surely they'll grandfather in someone eligible but not yet collecting, or even it all out so the defer-ers aren't penalized, but we're dealing with politicians, so all bets are off. And the longer they kick the can down the road, the less forgiving they'll have to be when they do make an adjustment. I don't know how to quantify that risk in my calculations.