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Old 03-12-2013, 10:05 AM   #221
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Originally Posted by ERD50 View Post
For reference: I am not yet 62, and I will re-evaluate each year once I've reached that point. If I'm lucky, I hope to be able to hold off and delay to 72, if it doesn't mean drawing down my portfolio too far in those years.
If this is in reference to delaying SS benefits, your "delay to 72" is probably a typo - SS benefits don't increase beyond age 70, so delaying two more years will be of no benefit.
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Old 03-12-2013, 10:09 AM   #222
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Originally Posted by ERD50 View Post
Not yet. The difference is (and I think haha could probably put this better than me), is that the SS early/late decision is very likely the cheapest and most secure longevity insurance that one could 'purchase'.

LTC is a lot more questionable. Will the ins co be there when you need them? Will you fall through some fine print and be denied? Will the inflation adjustment (if any) be enough? There is a lot of fine print in those contracts and a lot of gray area. I should probably educate myself more and make a more informed decision, but, IMO, it is a much tougher call than early/late SS for someone like me, with a spouse that is eligible for my larger benefit.

Some posters here have spouses who do not qualify for their benefit, their calculation is different.

For reference: I am not yet 62, and I will re-evaluate each year once I've reached that point. If I'm lucky, I hope to be able to hold off and delay to 72, if it doesn't mean drawing down my portfolio too far in those years.

-ERD50
i bought at 52/57 now 62/66-price constantly going higher-researching and
my wife and i pay 2700 total 4 year policies 5 percent inlation etc was 150/per day now worth 225 per day-if you wait to buy it will be astronomical and much tougher to qualify for. if you get it it will cost alot of your extra money-worrying about longevity and NOT insuring against the most devestatingly expensive part of longevity seems ludicrous. my point is you have reasons for not taking social security early yet come up with reasons not to buy LTC insurance. sounds just as questionable as our reasons to tale ss at 62.
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Old 03-12-2013, 10:12 AM   #223
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Social Security is about as certain a sure thing as one can imagine. Granted it may be cut somewhat, but I believe it will still be there.

LTC insurance is a different animal, IMHO. As pointed out by others it is a contract with lots of fine print. And, it seems that many insurers are raising rates so high that many people must either reduce their coverage or drop it altogether. If this happens after years of payments, and as the probability of needing to use it rises..... well, I would feel cheated. The ability of insurance companies to purge people through rate increases makes me highly suspicious of this product.
i researched it carefully and bought from a quality provider. do some of these things you say are possible. my point is that just as many good/bad reasons to buy not buy ltc as take/not take ss early. taking ss late as longevity insurance also means being old enough to possibly need ltc.
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Old 03-12-2013, 10:39 AM   #224
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Re: delaying SS and thinking of it an an annuity.
That's a very restricted annuity. You don't have any freedom to choose the monthly amount (and hence the initial deposit). You have exactly one specific monthly amount, which is determined by the SSA and you cannot pick a different amount.
And the entire deal can be changed at the stroke of a pen, by Congress changing the law.

With a normal annuity you can pick whatever benefit you want.
The company cannot change the deal unilaterally -- although they can go bankrupt and leave you with nothing.
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Old 03-12-2013, 10:53 AM   #225
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. my point is you have reasons for not taking social security early yet come up with reasons not to buy LTC insurance. sounds just as questionable as our reasons to tale ss at 62.
I think you are misinterpreting my post.

Yes, I gave reasons to delay SS. And those are reasons that others can review and see if/how it applies to them.

I said I have not gathered enough info to decide on LTC, and that it is complicated - that is different than saying I have reasons not to buy it, or anything that others can review. I admit I need to educate myself. How does ObamaCare fit into this?


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Originally Posted by REWahoo View Post
If this is in reference to delaying SS benefits, your "delay to 72" is probably a typo - SS benefits don't increase beyond age 70, so delaying two more years will be of no benefit.
You are being generous - it was a brain phart, not a typo Good catch, wouldn't want others to get the wrong idea, I'll see if I can still edit it (done).

-ERD50
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Old 03-12-2013, 11:09 AM   #226
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Re: delaying SS and thinking of it an an annuity.
That's a very restricted annuity. You don't have any freedom to choose the monthly amount (and hence the initial deposit). You have exactly one specific monthly amount, which is determined by the SSA and you cannot pick a different amount.
And the entire deal can be changed at the stroke of a pen, by Congress changing the law.

With a normal annuity you can pick whatever benefit you want.
The company cannot change the deal unilaterally -- although they can go bankrupt and leave you with nothing.
There's an upper limit to what you can buy, but not a lower limit.

To my mind, taking SS at 62 is the lowest risk (bird in the hand). By delaying after that, each month you are paying SS the amount you would have received and using it to buy a small annuity. You can do that until age 70, so there is plenty of flexibility.

As far as saving portfolio withdrawals, they will be lower early if you take SS at 62, but higher than they could have been when you reach 70. If you take SS at 70, portfolio withdrawals will be higher early but lower after 70. There is an implied return rate that makes the two choices equal for an average life expectancy (or your own custom scenario), and for SS it is usually a pretty substantial return. It can be higher than many here seem to assume for market returns, but lower than others assume, and is probably higher than any of us should be assuming for bond returns. If you think market returns will be low, take SS late. If your market assumptions are higher, take SS early. Either choice can result in higher spending throughout retirement (62 and beyond) depending on the assumptions you are making.
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Old 03-12-2013, 11:33 AM   #227
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Careful there. Please realize that you are saying that people who are planning to take it late have no common sense. If you study the posts of some of those people, I think you will find they have plenty of sense, common and other-wise.



I suggest that you study a bit. You are mis-applying 'life expectancy'. First, that is an average number, so by definition, half live longer. Second, you need to look at LE at a specific age.

https://personal.vanguard.com/us/ins...etirement-tool



Your 78.2 number does not apply. Careful what you call 'common sense'.



And when I'm less active, I might need more money, to have people do things for me I can no longer do for myself.



OK, don't take it personally, but I'm going to be more blunt here. That is an ignorant statement (not stupid, but 'ignorant', as in 'unaware of the facts'). If you do some research, you will find that the SS payouts are pure actuarial calculations. There is no intentional bias there. There are some biases in that they don't use different numbers by gender, but the early/late decision is not 'gamed' by the govt.

Common sense is great, but one needs to be informed to use it.




Yes, but I would probably put it in a way that would cause the mods to (rightly, to keep the peace), delete my post. So I shall refrain.

-ERD50
I think you're misinterpreting much of what I'm saying. First, I'm not saying that people who take SS later have no common sense. Of course we all have common sense and valid perspectives, otherwise we wouldn't be on this forum sharing information. From my point of view, the action of doing that is what doesn't make common sense.

I think it's you that may need to be more careful when you term my view as ignorant. We need to be respectful of all opinions on this forum and avoid labels like this.

Using averages like 78.2 is perfectly applicable. These are figures used in UN statistics to compare how well countries and societies are taking care of their people. Of course there are exceptions and differences to this average, but since we can't predict the future for each of us individually, it's a valid overall measure to use in planning. I think you would be well-served to become a little more informed with the numbers and run them for your situation yourself, such as using a system like SScalc. The age 81 break-even point is correct and almost all planners accept that fact. 78.2 is the statistical life expectancy for Americans. These are valid pieces of information quite relevant in making these decisions.

It's obvious you didn't like my post and strongly disagree. That's fine, as we all have a right to different views and interpretations. But please don't place other members' opinions in a light of somehow being ignorant. It doesn't contribute to a positive conversation.
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Old 03-12-2013, 11:44 AM   #228
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We are going to go with 62. I have seen too many people pass or become sick in their late 60's and early 70's. They really never got to enjoy the extra income.

I would like to enjoy the $ so less earlier for me is better then more later. This way I will be motivated to use it on fun stuff.
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Old 03-12-2013, 11:50 AM   #229
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I wonder if many on here have been swayed by the discussions to change there original thinking regarding when to take it?
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Old 03-12-2013, 12:28 PM   #230
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I wonder if many on here have been swayed by the discussions to change there original thinking regarding when to take it?
I have been swayed.
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Old 03-12-2013, 12:33 PM   #231
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I was swayed to wait until FRA or later - until the 'market unpleasantness' of 2008/9 swayed me back to taking it at 62. That old survival instinct is pretty darned strong...
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Old 03-12-2013, 12:33 PM   #232
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I have been swayed.

this is not necessarily a swaying thread-but a thinking thread- using all calculations not just the obvious total ss early/late amount received
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Old 03-12-2013, 12:35 PM   #233
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Old 03-12-2013, 12:36 PM   #234
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I should have stated I originally was planning on 62, but will now wait until FRA, but who knows, if uncle sam changes the rules that might change again.
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Old 03-12-2013, 01:17 PM   #235
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Richard8655, that 78.2 number is only valid for planning if you were just born today. If you are in your 50s or 60s now there is an extremely high probability that you will live past age 78.2. If you are married there is even a very high probability that you or your spouse will live past age 85. Look closely at ERD50s post number 216 for specifics.
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Old 03-12-2013, 01:37 PM   #236
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Here is spousal reduction calculator on the SSA site.
Benefits for Spouses

Note there is no entry for retirement date of the mate only for you.

I will contact SSA and report back.
I called SSA today they confirmed if I retired at age 62 and my wife retired at FRA (66) there would be no reduction in her spousal benefit. At 66 she would have the choice of going with her own benefit or 50% of my FRA benefit.
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Old 03-12-2013, 01:57 PM   #237
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I wonder if many on here have been swayed by the discussions to change there original thinking regarding when to take it?
Yes. I leaned heavily to the "one in the hand" camp. But after understanding the longevity insurance aspect, COLA, and spousal benefits, I'm now leaning heavily towards a delay as long as feasible.

But I think the following post is more relevant, it isn't important if anyone changes their mind, maybe the information just affirms their stance, or helps one to decide? :

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Originally Posted by gerrym51 View Post
this is not necessarily a swaying thread-but a thinking thread- using all calculations not just the obvious total ss early/late amount received


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Originally Posted by Richard8655 View Post
I think you're misinterpreting much of what I'm saying. First, I'm not saying that people who take SS later have no common sense.
Logic tells me that if it is 'common sense' to take it early, then those delaying must not be sensible. Is there another way to look at that?


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I think it's you that may need to be more careful when you term my view as ignorant. We need to be respectful of all opinions on this forum and avoid labels like this.
I tried to be clear, and I was serious - my use of the term 'ignorant' was not disrespectful, it was an observation. There are many things I am ignorant about, there is no shame in that, it is a fact.


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Using averages like 78.2 is perfectly applicable.
Don't get mad at me, but it just isn't applicable to a discussion of early/delay SS. That number you reference is ~ LE at birth, it includes those who died at a young age, and never reached SS age. The relevant statistic is LE at your age, which that calculator I linked provides.

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It's obvious you didn't like my post and strongly disagree.
That's not true. I'm only trying to clarify the facts.

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That's fine, as we all have a right to different views and interpretations. But please don't place other members' opinions in a light of somehow being ignorant. It doesn't contribute to a positive conversation.
As they say, you are entitled to your own opinion, you are not entitled to your own facts. IMO, unclear/mistaken facts do not contribute to a positive conversation. I hope you will review your numbers in this light.

-ERD50
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Old 03-12-2013, 01:58 PM   #238
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Richard8655, that 78.2 number is only valid for planning if you were just born today. If you are in your 50s or 60s now there is an extremely high probability that you will live past age 78.2. If you are married there is even a very high probability that you or your spouse will live past age 85. Look closely at ERD50s post number 216 for specifics.
Thanks jclarksnakes. The fact is that these statistics can be interpreted in many ways and lead to many different conclusions. Per the following webite:

How long will you live? Longevity and Life Expectancy Demystified (Part I) | LifeTwo

"For example, according to the CDC, the life expectancy of individuals born in 1950 is 68.2 years. However within this group white women have a life expectancy of 72.2 while African American males is 59.1--a significant difference."

"Another complicating factor is that life expectancy changes as one gets older. By the time a child reaches their first year, their chances of living longer increase (since they have made it past the child-killing maladies of the first 12 months). By the time an individual reaches late adulthood, the chances of living to a very old age end up being quite good. If you are a 65 year old living today, you have (on average) about 18 years left to live (83) even though the life expectancy of the population is under 78. Confused? You should be."

So, according to the article someone born in 1950 on average lives to 68.2 years. If you make it to 65 as of today, you have an average chance of continuing to 83. Since we're making these SS decisions at age 62 or younger, that 83 age would be even slightly less by a few years. Since the break-even point is 81, it still makes more sense statistically and financially to start at 62.
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Old 03-12-2013, 02:25 PM   #239
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It's very odd to me that at any time we generally have at least one thread running suggesting taking early SS, and at leaast one other thread espousing purchase of immediate annuities. Some posters don't just say that they want early SS, but that it is the only thing that makes sense, or that anyone who plans to wait must delusionally expect to be Methusalah

Other posters say that annuities are better than bonds and stocks, or at least that you need one, regardless of their high price and non-zero risk. Since there is no cheaper or less risky annuity than the one bought by delaying SS, this is hard to understand.

Can someone explain it?

Ha
You make a good point. It makes me think about all the comments we hear on this forum and others about about all the knowledge and wisdom expressed here. We have all that, but cannot seem to get a consensus on when to take SS, take the annuity or lump sum, pay off the mortgage or not, boxers or briefs, paper or plastic . . .
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Old 03-12-2013, 03:23 PM   #240
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Yes. I leaned heavily to the "one in the hand" camp. But after understanding the longevity insurance aspect, COLA, and spousal benefits, I'm now leaning heavily towards a delay as long as feasible.

But I think the following post is more relevant, it isn't important if anyone changes their mind, maybe the information just affirms their stance, or helps one to decide? :







Logic tells me that if it is 'common sense' to take it early, then those delaying must not be sensible. Is there another way to look at that?




I tried to be clear, and I was serious - my use of the term 'ignorant' was not disrespectful, it was an observation. There are many things I am ignorant about, there is no shame in that, it is a fact.




Don't get mad at me, but it just isn't applicable to a discussion of early/delay SS. That number you reference is ~ LE at birth, it includes those who died at a young age, and never reached SS age. The relevant statistic is LE at your age, which that calculator I linked provides.



That's not true. I'm only trying to clarify the facts.



As they say, you are entitled to your own opinion, you are not entitled to your own facts. IMO, unclear/mistaken facts do not contribute to a positive conversation. I hope you will review your numbers in this light.

-ERD50
Oh my gosh. Apologies for not realizing you're so smart and have all the facts! IMHO, it's your view that could use some fresh information and reevaluation.

You say your facts are correct. I say mine are. Let's let everyone judge on their own based on the information from our posts and others. They can double check anything stated here independently.
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