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SS Payments at 62 (What will/do you get?)
Old 08-07-2012, 12:01 PM   #1
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SS Payments at 62 (What will/do you get?)

I was reading a post about why one would take SS payments at 62 vs waiting, this has nothing to do with that.

I am 59, I am planning on retiring again soon (Took a 4 year sabattical in 2002). Though I would not go back but got one of those offers.

Anyway I digress.

I was looking at how much I would get if I took my SS at 62, 66 an 70. There are quite some difference according to the GOV Site. I also took my life expectancy and it appears to be 79. They never asked about my heart and I have a pacemaker and medicated High BP. So I am subtracting a few years for that. Mum died at 64 (Stroke) Dad a 74 Hear Attack. So I think 75 for me is more realistic if not pushing it. That said here are the numbers and some questions.
  • 62 - $1600pm
  • 66 - $2200pm
  • 70 - $3200pm.
  1. Remember I am 59 now, does that mean if I CONTINUE working till 62 and take it then I will get $1600 OR if I quit NOW and take it at 62?
  2. I am leaning towards taking it at 62. I will definately not wait till 70. But if I did take it at 66, based on the initial life expectancy of 79, the difference is $16,800 in favor of waiting. Is that worth it? If I pass earlier I win .
  3. DW is only 54 and has a lot longer to wait how will that affect her?
How do my numbers compare to some of you other folk in my position?

Thanks
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Old 08-07-2012, 12:11 PM   #2
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The online calculator assumes you work until 62 but I think there is a place there where you can model stopping work earlier. That said, for most people stopping work a few years earlier only makes a small change in benefits.

Remember, that the difference is probably not $16,800 in favor of waiting because you could theoretically invest the money you receive at 62 for a longer period of time.

Will DW be taking her own benefit or is your benefit higher than hers?
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Old 08-07-2012, 12:28 PM   #3
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Originally Posted by Katsmeow View Post
The online calculator assumes you work until 62 but I think there is a place there where you can model stopping work earlier. That said, for most people stopping work a few years earlier only makes a small change in benefits.
Yeah, that is the problem. Just the same, I've run the numbers before and as I recall, retiring at 55 only results in about a 6% reduction in benefit amounts compared to working until 62. At least that's the case for folks who have 30+ years of creditable work experience.

For me, the calculator shows $1774/mo if I stop working at age 62 and $1673 a month if I quit at 55.
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Old 08-07-2012, 12:30 PM   #4
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Will DW be taking her own benefit or is your benefit higher than hers?
She will take her own. She has SS from Canada and the USA so that is good. She has earn't less over the years but has paid the max into USA SS.
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Old 08-07-2012, 02:11 PM   #5
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Given your health issues and family history, I would lean towards 62 as long as you are sure the DW's benefit exceeds what she would receive as your spouse.

While I'm a number of years away from claiming, when the time comes I am planning on getting an analysis from socialsecuritysolutions.com on my optimal claiming strategy.
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Old 08-07-2012, 05:01 PM   #6
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If you pass before your DW she will have a choice between her SS or your SS, whichever is larger. Normally that favors having the one with the highest SS benefit wait until 70 since it will continue until you are both gone. The other spouse can take SS early. Not sure how that coordinates with Canadian retirement, but otherwise you sound like a prime candidate for that strategy.
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Old 08-07-2012, 05:26 PM   #7
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Originally Posted by Animorph View Post
If you pass before your DW she will have a choice between her SS or your SS, whichever is larger. Normally that favors having the one with the highest SS benefit wait until 70 since it will continue until you are both gone. The other spouse can take SS early. Not sure how that coordinates with Canadian retirement, but otherwise you sound like a prime candidate for that strategy.
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Old 08-08-2012, 05:51 AM   #8
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Originally Posted by ShokWaveRider View Post

I was looking at how much I would get if I took my SS at 62, 66 an 70. There are quite some difference according to the GOV Site. I also took my life expectancy and it appears to be 79. They never asked about my heart and I have a pacemaker and medicated High BP. So I am subtracting a few years for that. Mum died at 64 (Stroke) Dad a 74 Hear Attack. So I think 75 for me is more realistic if not pushing it. That said here are the numbers and some questions.
  • 62 - $1600pm
  • 66 - $2200pm
  • 70 - $3200pm.
  1. Remember I am 59 now, does that mean if I CONTINUE working till 62 and take it then I will get $1600 OR if I quit NOW and take it at 62?
  2. I am leaning towards taking it at 62. I will definately not wait till 70. But if I did take it at 66, based on the initial life expectancy of 79, the difference is $16,800 in favor of waiting. Is that worth it? If I pass earlier I win .
Thanks
The reason that using a formula to estimate your life expectancy is not very useful when making decisions about retirement funding is that when managing serious life risks what matters is usually the worst case, not the average case. A life expectancy of 79 probably means that you have a 50% chance of living longer than that and then the question is, if you do live longer, can you afford it? In general, with insurance, you should buy the insurance if you cannot afford to take the risk yourself and you usually don't try to guess the likelihood at all, just can you afford it. So, you put the seatbelt on in the car and buy fire insurance on your home even though having an accident or a fire is unlikely, because if it does happen, you can't afford to pay for it.

Of course, you have to be able to afford the insurance also. Similarly, with SS the decision to take payments earlier or later depends first of all on whether you can afford to wait or not. Many people can not afford to delay SS benefits, so there is no issue for them. If you can afford to wait the question of whether you should wait or not should depend on whether you can afford to pay your cost of living if you live longer than your median life expectancy. If you can afford to wait (buy additional annuity), but can't afford to pay your living expenses if you live beyond your median life expectancy AND if you then decide NOT to delay SS, you are living beyond your means.
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Old 08-08-2012, 06:35 AM   #9
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Originally Posted by ShokWaveRider View Post
  • 62 - $1600pm
  • 66 - $2200pm
  • 70 - $3200pm.


Thanks
Those numbers don't look right. If the pension a FRA is $2200, the early retirement @age 62 should be $1650 and the higher number for waiting @age 70 should be $2900. The $3200 is too high and the additional $50 for the early pension also makes a difference.
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Old 08-08-2012, 06:46 AM   #10
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If you can afford to wait (buy additional annuity), but can't afford to pay your living expenses if you live beyond your median life expectancy AND if you then decide NOT to delay SS, you are living beyond your means.
At Current Calculations Our stash will last another 35 years with no additional augmentation. Add the amount to cash that SS will give us and that extends to 40 +. Include return and Interest on investments and that could extend it further. The house is paid for. The Only variable is healthcare. After reading other post this seems to be the largest variable except for the folk that get it subsidized. Unless we do something in this country about that, we will move away in "full" retirement. (DW works for health care ONLY otherwise she would not). In that case our Healthcare costs would be ~$100 per year after 65 based on Ontario OHIP current rates. Before that, if we decide to go to BC, it will be $30 per month + drugs which currently are minimal. Ontario would be a little more but not much. These are estimates based on assumptions on what our taxable income would be if we both were not working. (75% of our retirement is in AFTER tax instruments).

I am still interested in what other folk get from SS at 62 and 66. I cannot justify leaving it till 70. I doubt if I will be around to collect it.
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Old 08-08-2012, 07:12 AM   #11
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I plan on retiring at 62 and my figures are close to what you are showing. My yearly report (2012) shows this.

62 - 1606
66 - 2134
70 - 2818
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Old 08-08-2012, 07:33 AM   #12
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Those numbers don't look right. If the pension a FRA is $2200, the early retirement @age 62 should be $1650 and the higher number for waiting @age 70 should be $2900. The $3200 is too high and the additional $50 for the early pension also makes a difference.
I was rounding as I was not interested in 70 I estimated, the actual number is $3210 assuming I continue paying. Perhaps your numbers assume you stop paying now.

Here are the actual numbers I got today. If you call in you get different numbers as it assumes you stop paying NOW.

$1604
$2279
$3210 Respectively.

If I stop paying as of December 2011

$1489
$1974
$2606

Respectively.
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Old 08-08-2012, 04:01 PM   #13
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If I work until I collect (assumes same salary as current)

62: 1634
67 (FRA): 2370
70 : 2957.

If I stop working now (zero income going forward), but delay collecting:
62: 1412
67 (FRA): 2004
70: 2487
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Old 09-01-2012, 05:53 PM   #14
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my current statement

62 1831
66 2450
70 3238
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Old 09-01-2012, 06:49 PM   #15
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You guys should all be glad you don't work in a nonprofit. Mine is something like:

1370
1990
2400
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Old 09-01-2012, 11:43 PM   #16
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I hope the spacing comes out on the figures below. The figures represent a multiplier of the amount I would receive at 62, 66, 67, and 70 from SS. I and my wife have been retired for some time. So I and my wife have not contributed to SS in a number of years. The first year at 62 is 75% of what I would get at 66 (my full retirement age). The number is adjusted the first year due to my birth day being in July. An interest rate of 1% is used to compound the value of previous years in each year. I am assuming that the inflation rate is constant across the board for SS retirement which makes that number essentially moot. The result is that using this calculation, retiring at 62, it would take till age 79 to equal the multiplier for retiring at age 66. Retiring for SS at age 67 the multiplier becomes relatively equal again at age 79. Retiring for SS at age 70 the multiplier becomes equivalent at between age 80 and 81. By changing the interest rate to 0, the ages do not change much but lower to 77, 78, and 80 respectively. I don't see why I would not want to retire for SS earlier than 62 unless there is some error in my numbers or logic.

62 66 67 70 int62 0.01
62 0.375
63 1.12875
64 1.8900375
65 2.658937875
66 3.435527254 0.5
67 4.219882526 1.505 0.54
68 5.012081352 2.52005 1.6254
69 5.812202165 3.5452505 2.721654
70 6.620324187 4.580703005 3.82887054 0.66
71 7.436527429 5.626510035 4.947159245 1.9866
72 8.260892703 6.682775135 6.076630838 3.326466
73 9.09350163 7.749602887 7.217397146 4.67973066
74 9.934436646 8.827098916 8.369571118 6.046527967
75 10.78378101 9.915369905 9.533266829 7.426993246
76 11.64161882 11.0145236 10.7085995 8.821263179
77 12.50803501 12.12466884 11.89568549 10.22947581
78 13.38311536 13.24591553 13.09464235 11.65177057
79 14.26694651 14.37837468 14.30558877 13.08828827
80 15.15961598 15.52215843 15.52864466 14.53917116
81 16.06121214 16.67738001 16.7639311 16.00456287
82 16.97182426 17.84415381 18.01157042 17.4846085
83 17.8915425 19.02259535 19.27168612 18.97945458
84 18.82045793 20.21282131 20.54440298 20.48924913
85 19.75866251 21.41494952 21.82984701 22.01414162
86 20.70624913 22.62909901 23.12814548 23.55428304
87 21.66331162 23.85539 24.43942694 25.10982587
88 22.62994474 25.0939439 25.76382121 26.68092412
89 23.60624419 26.34488334 27.10145942 28.26773337
90 24.59230663 27.60833218 28.45247401 29.8704107
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Old 09-02-2012, 08:19 AM   #17
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based on what i have read the logic in taking SS at 70 is it is basically a low cost inflation adjusted annuity which gets its maximum value at 70. It is longevity insurance..

do i think my wife or i will live to 100. Probably not. but i don't know for sure.


if you can afford to wait until 70 to take the SS it is probably wise to do so.

in this low interest environment we are in waitng until 70 is the best value - which i agree is a guess assuming you are long lived.
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Old 09-02-2012, 08:33 AM   #18
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if you can afford to wait until 70 to take the SS it is probably wise to do so.
If you are healthy and longevity is in your genes, I would agree. For me personally, though things can change before I turn 62 in 2027, I'm inclined to take it as soon as I can because the powers that be seem interested in protecting current recipients from the worst takeaways proposed by "reform" and saving the pain for those who are younger and/or not yet getting monthly checks.
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Old 09-02-2012, 08:41 AM   #19
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I am still for taking at 62 in our case, as the life expectancy of both me and DW is 79. That coupled with the fact that our nest egg will provide at least double the return of our combined 62 SS payments (Based on a simple NestEgg/30 calculation excluding returns).

I think it is different for all and should be decided on an individual basis.
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Old 09-02-2012, 10:46 AM   #20
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isn't you combined life expentancy because you are young. the older you get the longer the life tables extend. once you reach 65 there is a 50/50 chance one of you will reach 90.
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