Taking SS at age 62

[KarenC]

Is it nit-picking to say its not knit-picking?

It’s knot.

 

[SonofCohoes]

This is easy for me. Take it at 62, who knows if I’ll be here at 63.

 

[marko]

Bottom line... if you only live until 85 it doesn't matter much ... do whatever you want.

If I live to be 85, to quote the great wit Mike Tyson, "I won't know whether to be ecstatic or ludicrous".

Seriously, at 85 I'd be thrilled to be 'losing' money on the deal. With that kind of stat, I'm surprised we keep beating this around; I really don't see how it matters much at that age.

To me, two kinds of people take SS at 62: Those who are desperate for income and those who don't need it at all and view it as fun money.

 

[DawgMan]

To me, two kinds of people take SS at 62: Those who are desperate for income and those who don't need it at all and view it as fun money.

Currently FI at 55, I previously ran my RE income projections very conservatively planning on zero $ just in case the SS well went dry. So it appears now the forecast calls for SS to be fully funded thru 2037 which says I should count on my bennies, at least until I hit 72. If one is to believe in these stats and that there would be some reduced SS payment after 2037, would this not play into the decision of arguing an earlier distribution as opposed to waiting until 70? In my case, this will be "fun money", but why not take as much as you can which you are due? How does the fun money crowd look at this "dilemma"?

 

[marko]

If one is to believe in these stats and that there would be some reduced SS payment after 2037, would this not play into the decision of arguing an earlier distribution as opposed to waiting until 70?

"Take the money and run" has been a motto that has served me well in many instances throughout my life.

 

[pb4uski]

.... So it appears now the forecast calls for SS to be fully funded thru 2037 which says I should count on my bennies, at least until I hit 72. If one is to believe in these stats and that there would be some reduced SS payment after 2037, would this not play into the decision of arguing an earlier distribution as opposed to waiting until 70? ...

opensocialsecurity.com's advanced options allows one to calculate expected present values with or without a haircul for reduced benefits. While defaults of a 23% reduction in 2034 are provided the user can change the inputs if they want.

In our case the haircut doesn't seem to make a huge difference.

	No haircut	Haircut
Optimal solution	100.0%	100.0%
Both now	97.8%	98.9%
Both 65	99.0%	99.7%
Both at FRA	98.7%	96.3%
Me 70/DW FRA	99.2%	99.2%

 

[Major Tom]

For us when to take SS is pretty small potatoes in our retirement success compared to optimizing all our expenses. We took pensions at 55 and will take SS at 62. With optimized expenses, SS and pensions cover most of our retirement expenses, all the basics and a good chunk of discretionary, and we can let the portfolio grow and save it for LTC, money for the kids or extra discretionary items. Plus with factoring in the possibility of benefit cuts in the future, that makes taking it now more valuable to us.

I'm aware that in replying, I'm helping to veer the thread away from it's original intent. Apologies for that, imoldernu.

daylatedollarshort's outlook on when to take SS is very similar to mine. When I take it makes little difference to my portfolio survivability, and the income I can draw. With all that in mind, I am inclined to take it early, in order to help preserve the portfolio. I don't have kids, so there is no burning need to leave anything behind, though it would be fun to leave sizable amounts to select charities, or to surprise my nieces and nephews. "Oh my goodness - Uncle Major Tom, who moved to America years ago, has left me $$$? How cool!"

On the subject of thread drift. I frequent another forum (not financial) where the sole moderator is extremely focused on preventing thread drift. The moment the conversation veers into a related topic, he breaks the thread up, and creates a new thread. The overall effect is to dampen the conversation, and to keep well in check any fun we might be having. Kudos to our mods for letting us kids play in the sandbox, as long as we keep it respectful and clean

 

[Andre1969]

Currently FI at 55, I previously ran my RE income projections very conservatively planning on zero $ just in case the SS well went dry. So it appears now the forecast calls for SS to be fully funded thru 2037 which says I should count on my bennies, at least until I hit 72. If one is to believe in these stats and that there would be some reduced SS payment after 2037, would this not play into the decision of arguing an earlier distribution as opposed to waiting until 70? In my case, this will be "fun money", but why not take as much as you can which you are due? How does the fun money crowd look at this "dilemma"?

Is it 2037 now? I swear, I can't keep up. For years I had been hearing 2034, but then just this past year, the news articles were suddenly preaching 2035 (and trumping it up like that was a bad thing, rather than the fact that it got moved out a year). Kinda makes me wonder if the problem won't fix itself, more or less, by the time we actually get there?

Anyway, count me in on the "take the money and run" camp. I turn 62 in 2032, and I'm planning on filing then. My reasoning is that, if I'm already on SS and they make changes, I'm more likely to be grandfathered in. But for those not on it, and especially those years away from collecting, they're going to be the ones that get screwed.

I've run the numbers through FIREcalc a few times, and whether I start taking SS at 62, 70, or any year in between, the chance of success stays about the same. Even though the SS payment goes up each year I delay, having to dip into investments earlier on pretty much cancels that out.

I guess the tradeoff though, is that the SS increase is more reliable (provided they don't muff it up too much in the future), whereas the investments are more dependent on stock market returns.

 

[street]

"Take the money and run" has been a motto that has served me well in many instances throughout my life.

I'm taking and running method. I have no idea how long I will be breathing in air.
I don't need any more money at 70 years old I will take mine now, good or bad, right or wrong!
Good luck in decision.

 

[Teacher Terry]

I took mine at 65 a year early and it doesn’t really matter as due to WEP it’s a whole 377). We haven’t decided when to take my husband’s. We may do it at 64 which is the midway point. His FRA is almost 67.

 

[Sunset]

....

Anyway, count me in on the "take the money and run" camp. I turn 62 in 2032, and I'm planning on filing then. My reasoning is that, if I'm already on SS and they make changes, I'm more likely to be grandfathered in. But for those not on it, and especially those years away from collecting, they're going to be the ones that get screwed.
....

My plan is to delay, earning a higher payout.
If they make changes, then join in, for the same reason to be grandfathered in with a higher payout per month.

However, currently without changes, when the cut happens it happens to ALL people including the ones getting SS currently. There is no grandfathering currently.

So if you take it at the lower rate at age 62, then you get even less when the cut hits.

 

[pb4uski]

Is it 2037 now? I swear, I can't keep up. For years I had been hearing 2034, but then just this past year, the news articles were suddenly preaching 2035 (and trumping it up like that was a bad thing, rather than the fact that it got moved out a year). Kinda makes me wonder if the problem won't fix itself, more or less, by the time we actually get there?....

Here's the latest:

... Under the intermediate assumptions, the projected hypothetical combined OASI and DI Trust Fund asset reserves become depleted and unable to pay scheduled benefits in full on a timely basis in 2035. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 80 percent of scheduled benefits. The OASI Trust Fund reserves are projected to become depleted in 2034, at which time OASI income would be sufficient to pay 77 percent of OASI scheduled benefits. DI Trust Fund asset reserves are projected to become depleted in 2052, at which time continuing income to the DI Trust Fund would be sufficient to pay 91 percent of DI scheduled benefits. ...

https://www.ssa.gov/OACT/TR/2019/tr2019.pdf

 

[Alexi]

For us when to take SS is pretty small potatoes in our retirement success compared to optimizing all our expenses. We took pensions at 55 and will take SS at 62. With optimized expenses, SS and pensions cover most of our retirement expenses, all the basics and a good chunk of discretionary, and we can let the portfolio grow and save it for LTC, money for the kids or extra discretionary items. Plus with factoring in the possibility of benefit cuts in the future, that makes taking it now more valuable to us.

Me too! I'm single and debt-free including mortgage. Thank God, I was able to retire comfortably at age 55 with a company pension, 401k and health insurance. I took SS at age 62 and my nest egg continues to grow.

 

[Dtail]

At a minimum I will wait until 66 y.o., as I am managing MAGI for the ACA subsidy, plus receiving a lump sum pension at 65.
Then I will play it year by year. I don't see much room for Roth conversions between 66 and 72, so my way of potentially reducing the tax torpedo might have to come from partially spending down the TIRA.

 

[Alexi]

I don't see how pension and taxes makes a huge difference to the analysis... I presume that with SS and pension that 85% of SS will be taxed whether you take it at 62 or at 70.

+1

I have heard that 85% called the 'Success Tax'.

Back when 50% SS income was first subject to federal income tax, the arbitrary income thresholds put in the 1983 law were considered to be wealthy. However, those arbitrary income thresholds were never indexed for inflation, not even when the '85% of SS income subject to tax' law was enacted in 1993. Because of decades of inflation, today middle class seniors pay that SS tax. But [supposedly] that wasn't the original intent.

 

[pb4uski]

Me too! I'm single and debt-free including mortgage. Thank God, I was able to retire comfortably at age 55 with a company pension, 401k and health insurance. I took SS at age 62 and my nest egg continues to grow.

I retired at 56... haven't yet started SS and my nestegg continues to grow too!

In fact, it is 144% of what it was when I retired.... and I still have the option of starting SS anytime that I want.

 

[Dtail]

Back when 50% SS income was first subject to federal income tax, the arbitrary income thresholds put in the 1983 law were considered to be wealthy. However, those arbitrary income thresholds were never indexed for inflation, not even when 85% of SS income subject to tax law was enacted in 1993. Because of decades of inflation, today middle class seniors pay that SS tax [but that wasn't the original intent.]

There is some potential legislation floating out there which would raise the non taxable SS to 50S/100MFJ k.

 

[Alexi]

There is some potential legislation floating out there which would raise the non taxable SS to 50S/100MFJ k.

That bill [Social Security 2100 which is stuck in committee] would greatly help a multitude of today's middle class seniors. But even that bill doesn't fix the original problem because it doesn't index those updated income thresholds for future inflation.

https://www.congress.gov/bill/116th-congress/house-bill/860/text

 

[Caskem]

Taking SS at 62

My wife took hers at 62 as she was retired. I was going to wait but my FA said we were pulling about the same amount that I would get from SS from our retirement fund, so why not take SS? That's money NOT working for me and leaving alone money that IS working for me. Made sense.


Also, SS is not "inheritable" an the retirement fund is.

 

[ShokWaveRider]

At a minimum I will wait until 66 y.o., as I am managing MAGI for the ACA subsidy, plus receiving a lump sum pension at 65.
Then I will play it year by year. I don't see much room for Roth conversions between 66 and 72, so my way of potentially reducing the tax torpedo might have to come from partially spending down the TIRA.

Ditto, but with one difference, waiting till DW is 65 and eligible for Medicare, assuming there are still ACA subsidies available in the coming years, not sure they will be if funding keeps being whittled away. Otherwise will take SS to pay for DW's Healthcare Premiums.

 

[FREE866]

From what I've read it really comes down to 2 things:




1-The age you die--if you die before 80 then taking early SS probably made the most sense, but if you live past 85 then waiting till 70 makes the most


2-The return you receive on the money you receive at 62 till age 70. Meaning if you were 62 in 2011 and invested it into an S and P 500 index fund then you came out better than waiting till 2019 to start getting SS.


2 big unknowns...


but I could be wrong ......