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12-04-2015, 08:30 AM
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#121
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2005
Posts: 6,098
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Quote:
Originally Posted by Independent
Spending down assets while delaying can leave less for heirs if you die early .
OTOH, spending down assets while delaying, then rebuilding assets from your larger SS checks can increase your legacy if you die later.
Depends, of course, on your actual investment yield.
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yep , you either trade market risk for longevity risk but you will always be betting on one or the other .
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12-04-2015, 11:07 AM
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#122
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,499
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Quote:
Originally Posted by Runner
The main attraction of waiting until 70 is that my wife, who has never worked, will have her SS benefit or survivor's benefit calculated off of mine - so if I wait, hers will be correspondingly larger.
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My understanding is that the spousal benefit is calculated as 50% of your FRA benefit, so there is no advantage there, of your waiting till 70.
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12-04-2015, 11:55 AM
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#123
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,201
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The advantage would be is if you predecease your spouse that your spouse would inherit your benefit (with delayed retirement credits) if it is higher than her benefit. In Runner's case (and mine), since our DW never worked, that could be substantial since women tend to live longer than men.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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12-04-2015, 12:14 PM
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#124
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,366
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I'm not sure I even want to touch the SS part after all this.
But, OP is is living off income right now, not a portfolio, according to the OP. If it is the case that OP has very little savings, which seems unlikely but a possibility, it might be wise to go ahead and take the SS early and build up some savings.
If there is already a portfolio, then all the previously discussed stuff may apply.
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Social Security Misconceptions - interesting read
12-05-2015, 10:04 AM
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#125
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Recycles dryer sheets
Join Date: May 2011
Location: Salem
Posts: 91
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Social Security Misconceptions - interesting read
https://sites.google.com/site/ssmisc...the-individual
Another analysis to add to the discussion and keep you awake at night. David Fromme provides some data regarding the effect of taxes on your decision to take or delay SS.
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12-05-2015, 11:06 AM
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#126
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,149
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Quote:
Originally Posted by Independent
Depends, of course, on your actual investment yield.
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Yep. That's the real wild card and it's tough to account for.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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12-05-2015, 03:27 PM
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#127
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,134
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If one delays SS to 70 once can always change one's mind before 70. So, if one decides at 65 she needs the extra money, just file the claim and collect the checks.
If one decides to collect SS at 62, is it possible to reverse that decision if at 65 one decides it would have been better to wait? IIRC, there used to be a provision for paying back SS earnings and getting a larger benefit later, but, I thought that was ended.
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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12-05-2015, 03:46 PM
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#128
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Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,020
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Quote:
Originally Posted by Chuckanut
If one delays SS to 70 once can always change one's mind before 70. So, if one decides at 65 she needs the extra money, just file the claim and collect the checks.
If one decides to collect SS at 62, is it possible to reverse that decision if at 65 one decides it would have been better to wait? IIRC, there used to be a provision for paying back SS earnings and getting a larger benefit later, but, I thought that was ended.
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The cancel and repay option was stopped a few years back.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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12-05-2015, 05:53 PM
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#129
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,157
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I believe it's still possible within the first 12 months of receiving a benefit.
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12-05-2015, 06:36 PM
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#130
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Recycles dryer sheets
Join Date: May 2012
Posts: 421
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Quote:
Originally Posted by jpjr
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That's my quandary. If we take SS at 66, we can have 4 years untaxed until RMD kick in. Or we can not take it and pull out of our 401k and lower our RMD base. Mine and hubs SS are almost equal, so I'm thinking one takes at 66, the other at 70. That covers the longevity issue with surviving spouse. Guess I'm going to have to do more maths on the taxes.
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12-05-2015, 07:12 PM
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#131
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Recycles dryer sheets
Join Date: Nov 2013
Posts: 233
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WEP/GPO has made our decision to start SS at 62 a no brainer.
DW has an excellent COLAd pension... but when I go she will receive zero $s from my SS.
No point in drawing down our savings to for a higher benefit at 66 or 70.
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12-05-2015, 07:34 PM
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#132
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Recycles dryer sheets
Join Date: May 2013
Location: The Villages
Posts: 92
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Quote:
Originally Posted by walkinwood
My understanding is that the spousal benefit is calculated as 50% of your FRA benefit, so there is no advantage there, of your waiting till 70.
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Survivor benefit includes credits for delaying SS.
Sent from my iPad using Tapatalk
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12-05-2015, 08:09 PM
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#133
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,201
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Quote:
Originally Posted by Throwdownmyaceinthehole
....Mine and hubs SS are almost equal, so I'm thinking one takes at 66, the other at 70. That covers the longevity issue with surviving spouse. ....
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Unless the tax savings are compelling that sounds like a good play to me.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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12-06-2015, 04:50 PM
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#134
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Dryer sheet wannabe
Join Date: Dec 2013
Posts: 14
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How far should one deplete their portfolio in delaying SS? We are both retired and I will be 62 in march '16 and DW will be 58 in April '16. Hoping to delay to 66 and DW will draw her benefit at 62. Collecting a non cola pension at present but will need to draw down portfolio by 30% due mostly to an RV purchase (Truck & TT). After we start drawing SS, our income should exceed our expenses and allow us to rebuild our portfolio. Was planning to delay till 70 by using the Spousal option but now that that has gone poof, I will reassess the situation at 66. I guess my biggest worry is if inflation heats up & returns or so-so, I have no other option but to delay and take even larger withdrawals or tighten up the expense budget.
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12-06-2015, 06:16 PM
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#135
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Recycles dryer sheets
Join Date: Aug 2013
Posts: 484
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That is the $64,000 question. We are in a very similar situation, with non-COLA pension, future SS estimates, and savings to fill the gaps. I've run several FIRECalc scenarios and found that looking at three basic strategies; we both take SS at 62, both at FRA, or both at 70 the best case appears to be both at FRA. In building spreadsheet models I sensed that spending down savings to delay SS would increase exposure to sequence of return risk, and I verified by plugging in the numbers for each and running the FIRECalc "Investigate" tab "Spending Level" searching for a 100% success rate. Claiming at FRA offered an increase in spending level over age 62 as expected (2.7%), but stretching that out to age 70 resulted in a reduced spending level even lower than age 62 (-6%). I'm sure it is very much a YMMV thing, as everyone's assets and future income sources are highly variable. Increasing future benefits by delaying makes sense, but decreasing savings makes one more vulnerable to future benefit changes. I'd rather try to keep three three legged stool somewhat in balance, at least as long as inflation doesn't eat up the non-COLA pensions too early we stand a better chance of that.
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12-06-2015, 06:56 PM
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#136
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Location: Santa Paula
Posts: 4,067
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Take it now
Mine was the first year 1938, that I had to wait 2 months after 65 to get the full retirement. I took it then, because a lot of people do not figure in the present value of money.
My wife took hers at 62, and passed away at 68. We would have missed out on 3 years of payments if she took it at 65
The crossover point between 62 and 65 is at age 78.
I was still working, and had to pay tax on part of it, but I still got 5 years of payments rather than waiting until 70.
As they say YMMV (your mileage may vary), in other words, every situation is different.
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12-06-2015, 07:41 PM
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#137
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,366
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Quote:
Originally Posted by jd0850
How far should one deplete their portfolio in delaying SS? We are both retired and I will be 62 in march '16 and DW will be 58 in April '16. Hoping to delay to 66 and DW will draw her benefit at 62. Collecting a non cola pension at present but will need to draw down portfolio by 30% due mostly to an RV purchase (Truck & TT). After we start drawing SS, our income should exceed our expenses and allow us to rebuild our portfolio. Was planning to delay till 70 by using the Spousal option but now that that has gone poof, I will reassess the situation at 66. I guess my biggest worry is if inflation heats up & returns or so-so, I have no other option but to delay and take even larger withdrawals or tighten up the expense budget.
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The portfolio is sort of your emergency fund at this point. Anything you need to pay for that exceeds your income might be a problem if the portfolio gets too low. Long term care might have a fairly high burn rate for an extended period. Or a sudden big house repair, a new car, helping a son or daughter, a big health insurance deductible payment.
I'd think about what portfolio level you feel comfortable with considering potential emergencies (and their likelihood). Start SS if your portfolio drops to that level.
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12-07-2015, 04:03 AM
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#138
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2005
Posts: 6,098
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Quote:
Originally Posted by youbet
Yep. That's the real wild card and it's tough to account for.
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not any harder than accounting for how long you and a spouse will live . we either take on market risk or longevity risk , take your pick is what the bottom line is .
for us more and more i think 65 is a good balance .
i want to be covered under the hold harmless law once i start medicare . we are giving up 4200 a year in additional adders to my wife's early benefit for every year i wait to file since she can't get the adder until i file.
we are living off our own assets as well as not getting checks so i think 65 is a good point to tirn it on . i am 63 now.
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12-07-2015, 05:17 AM
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#139
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Recycles dryer sheets
Join Date: May 2013
Location: The Villages
Posts: 92
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Quote:
Originally Posted by jd0850
How far should one deplete their portfolio in delaying SS? We are both retired and I will be 62 in march '16 and DW will be 58 in April '16. Hoping to delay to 66 and DW will draw her benefit at 62. Collecting a non cola pension at present but will need to draw down portfolio by 30% due mostly to an RV purchase (Truck & TT). After we start drawing SS, our income should exceed our expenses and allow us to rebuild our portfolio. Was planning to delay till 70 by using the Spousal option but now that that has gone poof, I will reassess the situation at 66. I guess my biggest worry is if inflation heats up & returns or so-so, I have no other option but to delay and take even larger withdrawals or tighten up the expense budget.
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The fact that you will draw down your portfolio by 30% with an RV purchase is what concerns me. RVs are a quickly depreciating asset. Is there a less expensive way to do this?
Sent from my iPad using Tapatalk
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12-07-2015, 05:31 AM
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#140
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
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Quote:
Originally Posted by Pbkmaine
The fact that you will draw down your portfolio by 30% with an RV purchase is what concerns me. RVs are a quickly depreciating asset. Is there a less expensive way to do this?
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+1
jd0850, we were in a similar circumstance and purchased an RV after retiring but prior to drawing SS. The purchase price dinged our portfolio by only 6% but Mr. Market quickly took away another 30% (this was in 2008/09).
If your purchase depletes your portfolio by 30% and the market takes a dive, you could see 50% or more of your life savings evaporate, at least for a while. Could you live with this?
__________________
Numbers is hard
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