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Old 12-21-2016, 08:39 AM   #41
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Originally Posted by jim584672 View Post
It may be actuarially neutral in a broad sense. But women live longer then men yet it doesn't consider gender in the payout rate. So wouldn't it favor a woman to take it later and a man to take it sooner?
What it actually says is that SS isn't actuarially neutral across the sexes, just ages.
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Old 12-21-2016, 09:05 AM   #42
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We're 55 and 56, so we still have 7 more years of reading threads on this topic before an actual decision has to be made. At the moment, our plan is to take it one year at a time and base the decision on evaluation of investment returns and our health. My benefit is higher than DW and she will likely live longer, possibly into her 90s. So we'll defer mine as long as possible and take hers at whatever point seems sensible from a cashflow standpoint. We have two pensions, rental income, and a taxable account that should enable deferral to 70 for both. But if, at some point, the taxable account gets below my comfort threshold, we'll decide whether to start tax-deferred WDs or start DW's SS, most likely the latter.
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Old 12-21-2016, 09:29 AM   #43
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People keep stumbling over the fact that it was specifically designed to be very close to actuarially neutral.
The fact that it is actuarially neutral is demonstrated by the fact that we always have these discussions. Because if it was clear that one way was better than the other, there would be no debate & no discussion. Note that we never have debates about the sum of 2 + 2.

If (on average) it doesn't matter when you take SS, then you might as well take it at 62. Or 70. Because it doesn't matter.
^^^ I agree. Let's stick to easy-to-resolve issues like whether to pay off a mortgage early or not....
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Old 12-21-2016, 09:34 AM   #44
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Sorry - didn't notice NW-Bound beat me to the punch line.


I'll take your downvote and see myself out the door... :^)
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Old 12-21-2016, 09:36 AM   #45
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Imagine if you could take out a mortgage on your house to plop it in the market in early 2009. Woulda, shoulda, coulda...
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Old 12-21-2016, 09:43 AM   #46
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...
Watch for him to come back with a pay-the-mortgage-early-or-not thread.
Should I pay off my mortgage early if it requires me to take Social at 62?
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Old 12-21-2016, 11:16 AM   #47
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I turn 62 in Feb, 2017. I'm planning on taking my very small SS at Medicare age of 65 or FRA of 66 and 2 months.

The main reason for not taking it at 62 is that 16% of any SS with go toward increased Obamacare costs. That's in addition to federal income taxes of 15% on the taxable portion (50-85%).

Now, if all that changes and my health insurance costs are not based on income, I'll reconsider!


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Old 12-21-2016, 04:09 PM   #48
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I have been going back and forth on when to claim SSN as well since I can apply in January, 3 months before turning 62. Do I need the money? No. Will I be taxed? Yes, because I bring in a little bit more "earned income" than the threshold allows. My other income is not "earned income" and I am able to still save a good portion of that.

Two thoughts I keep coming back to.

1) The yearly difference according to my statements between claiming at 62 versus 66 and 2 months will not make or break me. If it were to make or break me I'd already be in trouble...right? The difference is about $6,700 a year. I'm not waiting until 70 where the difference is closer to $$14,000 because I doubt I will live into my 80's. But again I say the $14,000 will not make or break me.

2) My children can not inherit my SSN payments but they can inherit the assets I have left.

It's tough. I don't know what I will do...but I am leaning towards claiming in Jan.
I agree that it can be viewed as longevity insurance but I do tend to value the present value of money and what it can be used for allowing me to continue to save and invest on the side of the fence I have more control over.
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Old 12-22-2016, 03:38 AM   #49
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by the same thinking by taking ss early you will be pulling more out of your portfolio for a lifetime starting at age 70 then you would getting a 69% bigger check at 70 vs 62 .

so it can go both ways for heirs .
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Old 12-22-2016, 07:51 AM   #50
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If married, it's a big deal that the larger earner waits till 70 if at all possible due to the survivor benefit.
It's a "big deal" only if you are highly dependent on the SS income. Which kinda implies that you are not Financially Independent or Retiring Early -- so you probably aren't even reading this web site.
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Old 12-22-2016, 07:54 AM   #51
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The main reason for not taking it at 62 is that 16% of any SS with go toward increased Obamacare costs.
Only until early next year.
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Old 12-22-2016, 08:08 AM   #52
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And as Senator suggested - you have more insight into your own health and family longevity than the statisticians...
You know if you have high-blood pressure, diabetes, prior heart attacks, smoking or drinking issues, previous cancer, etc.
You know what you don't know?
You don't know about that drunk in the pickup truck coming around the bend in your lane.
You don't know about the pneumonia virus that has your name on it.

Whatever insights you have into your own health can only tell you that you should take SS as early as you can -- if you know your health is bad. None of this knowledge is useful to deciding to defer.



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The 7% is meaningful. No one's "safe" type money is earning 7% guaranteed presently.
The 7% is not meaningful. It doesn't mean what you think it means. It is not a return, it is a payout rate.
If you do an analysis with the incorrect assumption, you will come up with an incorrect answer.

To get that 7% higher payout later, you have to give up 100% now. All that that means is for the first (100/7 =) 14.8 years you are just getting your own money back, as little bit at a time. Only after you've gotten all your own money back do you see a net benefit.
Which is okay, if that's what you want .... but it is not the same thing as a 7% return.
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Old 12-22-2016, 08:13 AM   #53
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by the same thinking by taking ss early you will be pulling more out of your portfolio for a lifetime starting at age 70 then you would getting a 69% bigger check at 70 vs 62 .

so it can go both ways for heirs .
Yes, perhaps. But I think it depends on whether one thinks they have more years before 70 than after 70. None of us has a crystal ball so it truly becomes a "best guess", albeit based on the longevity genes of our families, luck or whatever.

Lastly, there are reasons the incentives are there to delay. Many pass away in their 60's and early to mid-70's. ( and many even before that!) Because I know our government knows this, that becomes part of the incentive to take it at 62. At least for me.
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Old 12-22-2016, 08:33 AM   #54
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Many pass away in their 60's and early to mid-70's. ( and many even before that!) Because I know our government knows this, that becomes part of the incentive to take it at 62. At least for me.

If the SS payout is actuarily balanced then for the government it should not make a difference. Individuals yes, but the government should not detect a long-term difference. Right?
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Old 12-22-2016, 08:53 AM   #55
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You know what you don't know?
You don't know about that drunk in the pickup truck coming around the bend in your lane.
You don't know about the pneumonia virus that has your name on it.

Whatever insights you have into your own health can only tell you that you should take SS as early as you can -- if you know your health is bad. None of this knowledge is useful to deciding to defer.
You are right, you do not know about the anomalies. Just as you do not know whether to save for ER at all or not.

You do know about the age that 50% live longer and 50% do not.

Blackjack players give their souls to get the 52% advantage on the house. By knowing your health, you can get the odds up to 60%+ in your favor. If you are a woman, it's even easier. Women generally live longer.
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Old 12-22-2016, 09:00 AM   #56
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If the SS payout is actuarily balanced then for the government it should not make a difference. Individuals yes, but the government should not detect a long-term difference. Right?
If anything, people are living longer, and that's one reason the SS fund is running out of money. There's talk about raising FRA to 69!

No matter what you do for a living, can you imagine yourself working till 69? It's tough with a desk job, let alone menial work.

Yes, I do agree that plenty of people drop dead in their 60s and 70s, some even in their 50s. But there are some true geezers out there to more than make up for the short lived ones. Life is really unfair. Some get longevity, and more money too.

I say the way to balance it is to cut geezers' SS in half if they live above a certain age, say 85. That will teach them.
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Old 12-22-2016, 09:15 AM   #57
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Well...for those interested and that have the time they can parse thru this data. I gave up on the SSN actuarial studies. Ha!
It's from a 2006 CDC study printed in 2010...so just a few years old and I don't know how often they update it.

Not making a statement, just providing a link for data.

Summary: From one of the tables it looks like for every 100,000, the people that live to a certain age are:

------------ People Left------ % Deaths (out of original 100,000)

Age 60-: 88,251 = 11.7%
Age 65-: 83,251 = 16.7%
Age 70-: 76,661 = 23.3%
Age 75-: 67,331 = 32.7%
Age 80-: 54,201 = 45.85
Age 85-: 37,805 = 62.2%
Age 90-: 20,898 = 79.1%

https://www.cdc.gov/nchs/data/nvsr/nvsr58/nvsr58_21.pdf
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Old 12-22-2016, 09:15 AM   #58
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I say the way to balance it is to cut geezers' SS in half if they live above a certain age, say 85. That will teach them.
They are forgetful by 85, usually. SS could get cut and many wouldn't notice.
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Old 12-22-2016, 09:21 AM   #59
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Should you and I run for Congress, sharing the above platform?

Look at what Sheesh1 posted above. Out of 100,000 people, almost 21,000 survive till 90. That's 21%, or 1 in 5, a whole lot more than I expected.

I guess these geezers are hiding out in their home, and do not go out much. Hence we do not see them in public.

Seriously, my 90-year-old mother-in-law does not leave the home much at all.
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Old 12-22-2016, 09:25 AM   #60
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I like your "glass half full" optimism NW-Bound!

Or one could say...."Uh oh...almost 80% of us don't make it"

Or that "almost" 50% of us don't make it to 80.
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