Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Old 01-05-2013, 10:20 AM   #41
gone traveling
 
Join Date: Mar 2007
Posts: 559
Quote:
Originally Posted by fh2000 View Post
I may have missed this particular reason to delay SS in this long thread: I will have to wait to collection SS until I have converted some (or most) of my 401K/IRA to Roth. Therefore, I have not decided to collect at 66 or 70. But, not at 62 for sure.

i investigated this . ss only uses actual EARNED income on this test. money from retirement accounts does not apply to the 14,500 max.

don't believe me. go to ss and read it . I don't know how to do links
gerrym51 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-05-2013, 10:40 AM   #42
Thinks s/he gets paid by the post
ronin's Avatar
 
Join Date: Oct 2003
Posts: 1,319
Quote:
Originally Posted by LeavingOhio View Post
Is there something here I'm not considering?
If anyone wants to review these 2 articles, seems like it is possible to access the archives of the Journal of Financial Planning. The info contained is also addressed in the author's new book (see link below). It is pertinent to the OP's original question. See Fig. 1 in each.

fpanet.org/journal/SocialSecurityWhentoStartBenefits

fpanet.org/journal/HowtheSSClaimingDecisionAffectsPortfolioLongevity/

Social Security Strategies
__________________
We are, as I have said, one equation short. – Keynes
ronin is offline   Reply With Quote
Old 01-05-2013, 10:47 AM   #43
gone traveling
 
Join Date: Mar 2007
Posts: 559
I suspect that most of us realize we can get more total money from ss if we wait and take it later assuming we live long enough.

However even if you have enough money to get you to that later ss start
human nature dictates "take it as soon as possible".

In my case logic says take it later- i can afford to take it at 70-but i will take it at 65 when I start medicare.

Logic loses to emotion every time.
gerrym51 is offline   Reply With Quote
Old 01-05-2013, 10:52 AM   #44
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,173
I doubt if any reform or means testing will benefit those who take SS at 62 versus those who take it in later years. Those who took SS at 62 would probably see some type of freeze on the yearly increase or some actuarial adjustment to payments that would equalize the affects. SS seems pretty good at using actuarial tables and such to make things fair for the overall group.

I think it is far more likely we will see another increase in the retirement age and a bigger increase in the reduction for retiring before that age.

I also think high income people have more to fear from increased taxation of SS benefits than an actual reduction in them due to means testing. The 'means testing' will result in higher taxes on the benefits, not reduced benefits. Just my 2 cents.
__________________
Comparison is the thief of joy

The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 01-05-2013, 11:28 AM   #45
Thinks s/he gets paid by the post
Rustward's Avatar
 
Join Date: Apr 2006
Posts: 1,684
Quote:
Originally Posted by Chuckanut View Post
I doubt if any reform or means testing will benefit those who take SS at 62 versus those who take it in later years. Those who took SS at 62 would probably see some type of freeze on the yearly increase or some actuarial adjustment to payments that would equalize the affects. SS seems pretty good at using actuarial tables and such to make things fair for the overall group.

I Agree 100%.
Rustward is offline   Reply With Quote
Old 01-05-2013, 03:27 PM   #46
Thinks s/he gets paid by the post
Lisa99's Avatar
 
Join Date: Aug 2010
Posts: 1,440
Quote:
Originally Posted by fh2000 View Post
I may have missed this particular reason to delay SS in this long thread: I will have to wait to collection SS until I have converted some (or most) of my 401K/IRA to Roth. Therefore, I have not decided to collect at 66 or 70. But, not at 62 for sure.
Why do you have to wait until you've converted to Roth?
__________________
Learning how to be still, to really be still and let life happen - that stillness becomes a radiance -
Morgan Freeman
Lisa99 is offline   Reply With Quote
Old 01-05-2013, 03:37 PM   #47
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
Quote:
Originally Posted by Lisa99 View Post
Why do you have to wait until you've converted to Roth?
Not to answer for fh2000, but folks sometimes delay SS or pensions until Roth conversions are done to avoid higher tax rates.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
John Greaney on SS
Old 01-05-2013, 04:57 PM   #48
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 3,431
John Greaney on SS

Many here are familiar with John Greaney, one of the 'fathers' of retiring early. John RE'd in 1994 at age 38.

He just posted an article on his website called "Social Security, a Better Deal than I Thought?" where he discusses SS benefits based on different earning records:

Social Security a better deal than I thought?

omni
omni550 is offline   Reply With Quote
Old 01-05-2013, 06:07 PM   #49
Administrator
Alan's Avatar
 
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,056
Quote:
Originally Posted by youbet View Post
Not to answer for fh2000, but folks sometimes delay SS or pensions until Roth conversions are done to avoid higher tax rates.
My thoughts also. As income increases the tax on SS income increases. And Roth conversions count as income.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
Alan is offline   Reply With Quote
Old 01-05-2013, 06:25 PM   #50
Recycles dryer sheets
 
Join Date: Jul 2008
Location: Sacramento area
Posts: 467
Quote:
Originally Posted by Alan View Post
My thoughts also. As income increases the tax on SS income increases. And Roth conversions count as income.
+1. My SS Disabiity is 85% taxable.
Original Wally is offline   Reply With Quote
Old 01-05-2013, 06:33 PM   #51
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Quote:
Originally Posted by omni550 View Post
Many here are familiar with John Greaney, one of the 'fathers' of retiring early. John RE'd in 1994 at age 38.

He just posted an article on his website called "Social Security, a Better Deal than I Thought?" where he discusses SS benefits based on different earning records:

Social Security a better deal than I thought?

omni
I hope that nothing in this article surprises anyone here. The system is progressive on both ends. First the bend points, as he explains. Then taxation when benefits are recieved. One can pay income tax on anywhere between 0% and 85 % of the benefit received.

Also, the difference between a private annuity and SS is magnified under today's low interest rate conditions.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 01-05-2013, 07:02 PM   #52
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
freebird5825's Avatar
 
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,037
Quote:
Originally Posted by AWeinel View Post
Yup. If nothing else... MAD money.

Get it whild you can.
Quote:
Originally Posted by Lazarus View Post
I will take benefits as soon as I can. Bird in the hand kind of guy. I retired as early as I could also.
Same thoughts here. I have 7 years 8 months until I turn 62. I have very little confidence that SS benefits then will look anything like SS benefits (per my SS statement) now. I am single, and most likely shall remain so, so I have no spousal considerations to think about. I have no benefits from my late husband (govt), so there is no dilemma on whose to draw on and when.

I will either use it as mad money , and/or plunk it into an existing TE muni bond fund to generate even more usable (if needed) monthly income.
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
freebird5825 is offline   Reply With Quote
Old 01-05-2013, 07:42 PM   #53
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 25,302
I'm looking at that decision now since I'll be 63 next Spring and didn't apply at 62 since I'm working. Conditions at work are scheduled to deteriorate effective May 1st so I'll almost certainly quit unless a large ship turns a sharp corner.

After that, I may choose to live especially frugally for one year, drawing on savings as needed and then apply at 64, or go for it at 63+ a couple of months. DW and I will review the numbers and make a decision then. Or we may hang in there for a couple of years afterwards. Right now I don't know.

Family history is a crap shoot. I might live to be 95 or get The Big Ache next week. So it comes down to "How lucky do you feel, Punk?"

__________________
When I was a kid I wanted to be older. This is not what I expected.
Walt34 is offline   Reply With Quote
Old 01-06-2013, 07:47 AM   #54
Thinks s/he gets paid by the post
Cut-Throat's Avatar
 
Join Date: Jan 2007
Location: Minneapolis
Posts: 1,172
Forget trying to calculate how much 'You'll Get'...Focus on How much you get to spend.

Here is a pretty simple calculation for those that wish to spend more money in retirement and do not care about leaving an estate. For those that have a Big enough Portfolio and can afford to wait until 70 to take SS, you'll have more to spend every year of retirement.

Let's Say you retire this year at age 62 with the $1 Million Portfolio and decide to take a 4% SWR. You get Social Security of $19,476 per year at age 62 and delaying to age 70 would get you $34,092 per year. Let's assume no inflation for ease of calculations.

Scenario age 62. Your SWR is $40K per year and Social Security of $19,476 gets you a Spending total of $59,476 for each year of your retirement period.

Scenario age 70.
You stash 8 years of $34,092 from your portfolio into a savings account for a total of $272,736. Your portfolio is now down to $727,264. Your 4% SWR is now $29,090 per year and you remove $34,092 from your savings account giving you a total of $63,182 to spend each year for the rest of your 30 year retirement period.

The Delay to age 70 gives you $3,706 more every year starting at age 62 with no more increased risk.

No need for any stupid 'break even analysis'.

If your WR is more conservative, such as a majority of the people here and myself, the results are even more compelling. At a 3% WR plus SS at age 62 scenario is a total of $49,476 and the age 70 scenario is $55,910. The delay of SS to age 70 now increases your annual spending by $6,434.
Cut-Throat is offline   Reply With Quote
Old 01-06-2013, 07:54 AM   #55
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
I like the simplicity of Cut-Throat's analysis.
__________________
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
pb4uski is offline   Reply With Quote
Old 01-06-2013, 08:20 AM   #56
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 4,629
Quote:
Originally Posted by LeavingOhio View Post
Would like to get opinion on this.

I am of the age that I can get "full" Social Security benefits at age 67. Being that I post here, it should be clear that I do not want to work until that age. I've invested my money and plan to be completely debt free by the time I retire (sometime between age 55-60, but probably closer to 60). Unless my wife continues to work then (she hasn't decided yet), we will need to take money from our investments on which to live. BUT, when I turn 62 and then my wife does also not too long after, we can start taking early, diminished Social Security disbursements.

I've seen often that people recommend putting off taking that money as long as possible so that the amount is increased. Sounds fine, but then while I wait for that, I decrease my own investment pile.

I didn't invest my money so that I could leave money to my children, but given a chance, I wouldn't mind being able to leave them something. Wouldn't it then be better to take Social Security as soon as possible to minimize my own draw from my own money so that not only will it grow, but it's money I can pass down?

Is there something here I'm not considering?

Thanks!
If you defer SS, you will draw down less in the early years, but more in the later years. There's a cross-over point that depends on your investment returns (lower returns move the cross-over to a lower age).

If you've got enough money that you have no concerns about running out before you die, it's just math based on some unpredictable variables (investment returns and date of death). I like Cut-Throat's approach.

If there's a real concern about running out of money if you live to an unusually high age, then you should consider longevity insurance, and deferring SS is currently a much better buy than a private SPIA.

I'm 65 and my wife is 64. We haven't started yet. That's a combination of low expected investment yields, an unusually risk-averse personality, and pure inertia.
Independent is offline   Reply With Quote
Old 01-06-2013, 08:23 AM   #57
Thinks s/he gets paid by the post
bUU's Avatar
 
Join Date: Dec 2012
Location: Georgia
Posts: 2,240
Quote:
Originally Posted by pb4uski View Post
I like the simplicity of Cut-Throat's analysis.
So will I, until someone posts a simple rebuttal.
bUU is offline   Reply With Quote
Old 01-06-2013, 08:54 AM   #58
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 2,525
Quote:
Originally Posted by bicker View Post
So will I, until someone posts a simple rebuttal.
If the finances of the organization paying the annuity (AKA the US Government) were in order I would agree with the premise. Since they are not by a long mile, I would argue that depleting one's assets betting that 30 years of future payments from a financially crippled organization I have no control over are assured is too risky.
ejman is offline   Reply With Quote
Old 01-06-2013, 09:26 AM   #59
gone traveling
 
Join Date: Mar 2007
Posts: 559
SIGH! this is getting old. it's an emotional issue more than a practical one.

no one knows FOR SURE when your going to DIE!(at least mostly no one).

taking it early and getting it now means it does not matter if equations show you get more while waiting.

if taking it early lets you enjoy your earlier retirement years more than your later to old to do anything years than so be it.

gerrym51 is offline   Reply With Quote
Old 01-06-2013, 09:29 AM   #60
Thinks s/he gets paid by the post
 
Join Date: Sep 2006
Posts: 1,743
We're about 3 years away from early SS. When we approach the decision I plan to run the different scenarios on Firecalc, Fidelity RIP, Quicken lifetime planner, I-ORP and ESP planner and make a decision based on results.

We plan to leave a legacy to our kids so the portfolio size at the end of the plan is as important to us as the spending levels.
Corporateburnout is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


» Quick Links

 
All times are GMT -6. The time now is 05:08 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.