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Old 12-04-2015, 09:30 AM   #121
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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.
yep , you either trade market risk for longevity risk but you will always be betting on one or the other .
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Old 12-04-2015, 12:07 PM   #122
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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.
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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Old 12-04-2015, 12:55 PM   #123
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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.
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Old 12-04-2015, 01:14 PM   #124
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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
Old 12-05-2015, 11:04 AM   #125
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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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Old 12-05-2015, 12:06 PM   #126
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Depends, of course, on your actual investment yield.
Yep. That's the real wild card and it's tough to account for.
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Old 12-05-2015, 04:27 PM   #127
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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.
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Old 12-05-2015, 04:46 PM   #128
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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.
The cancel and repay option was stopped a few years back.
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Old 12-05-2015, 06:53 PM   #129
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I believe it's still possible within the first 12 months of receiving a benefit.
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Old 12-05-2015, 07:36 PM   #130
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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.
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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Old 12-05-2015, 08:12 PM   #131
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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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Old 12-05-2015, 08:34 PM   #132
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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.

Survivor benefit includes credits for delaying SS.


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Old 12-05-2015, 09:09 PM   #133
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....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. ....
Unless the tax savings are compelling that sounds like a good play to me.
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Old 12-06-2015, 05:50 PM   #134
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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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Old 12-06-2015, 07:16 PM   #135
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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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Old 12-06-2015, 07:56 PM   #136
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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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Old 12-06-2015, 08:41 PM   #137
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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.
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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Old 12-07-2015, 05:03 AM   #138
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Yep. That's the real wild card and it's tough to account for.
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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Old 12-07-2015, 06:17 AM   #139
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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.

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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Old 12-07-2015, 06:31 AM   #140
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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?
+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?
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