Chuckanut
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Good Grief! You mean your situation may be different from others here? Horrors!! How can that be?
This is another entertaining and somewhat informative topic. Thanks to all.
Theory Behind taking Social Security Early?
- Thread starter LXEX55
- Start date
Good Grief! You mean your situation may be different from others here? Horrors!! How can that be?
This is another entertaining and somewhat informative topic. Thanks to all.
NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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I just made up that term in a hurry, trying to get something to name the tactic under discussion. Just now, search the Web and see that term being used to describe something else. Sorry if I create some confusion.
Anyway, I do not put aside specific amount of cash because my AA already has mucho cash, as much as 30%. By employing "tactical AA", I can spend down that pile of cash if the market goes south.
Cash is fungible, and it's just the matter of accounting when that cash pile that goes down with spending in a market downturn, and has the effect of keeping stock AA up when equity prices drop.
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Shardo
Dryer sheet aficionado
SS at 62 vs 66.7
I crunched some numbers re starting SS at 62 vice 66 and if I waited to take it until 66, I'd catch up at 78 yrs old. Most of my mom's family didn't live that long so I took it at 62.
I crunched some numbers re starting SS at 62 vice 66 and if I waited to take it until 66, I'd catch up at 78 yrs old. Most of my mom's family didn't live that long so I took it at 62.
Cut-Throat
Thinks s/he gets paid by the post
Shardo
Dryer sheet aficionado
No, I retired at 57 with a pension and a healthy 401k that I'm only tapping at 2%/yr.
Cut-Throat
Thinks s/he gets paid by the post
And yet, for Social Security you decided that 78 years old was pretty much unachievable?
If you expect to die before 78 you should probably be taking out more.
Probably at least 5%.
Shardo
Dryer sheet aficionado
Cut-Throat
Thinks s/he gets paid by the post
Correct ! --- And that is Exactly the same thinking you should apply to the 'When to take Social Security' Question. ---
Apparently if you are wrong you'll be leaving Social Security benefits money on the table.
You are willing to take a risk there, but not sure enough of your longevity to spend more than just 2% ?
Hey, it's your money and I'm sure your heirs will be very happy eventually. It just seems inconsistent.
Unfortunately, we all must make a prediction regarding our end of life. I think it's perfectly reasonable to plan for a long life and end up leaving more if we die sooner. But when I do that, I use the same predicted age for all my pools of income. I don't understand why one would ever use more than one.
Music Lover
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Correct ! --- And that is Exactly the same thinking you should apply to the 'When to take Social Security' Question. ---
But since they already have more than enough if they live longer, they are making a choice to take the SS now instead of later because the odds favour that choice.
Jeb-NY
Recycles dryer sheets
I may have missed it, I started skimming after the first few page, but I looked at SS a different way. I never considered it necessary to maximize the amount of money I pulled out of SS. I looked at it as an annuity that was increasing in value at 8% per year till I reached 70. This made sure if the market went in the crapper my wife and I would still have a steady income and if my wife outlived me she would have more money in her old age. We have a large enough retirement stash that SS wasn't needed right away but as other said if necessary we could always start sooner. Since I just started drawing at 70 a few months ago the discussion will not effect us. We did get in on the apply and suspend so my wife could draw half of my 66 SS, couldn't see leaving that on the table. She will draw hers in a few months when she turns 70, hers will not be as high as if she had waited and took 1/2 of my 70 SS but the difference was a few hundred dollars so not worth worrying about.
I might have made different decisions if I was single or either of us had serious health problems but with survivor benefits I made the right decision for us.
By the way I retired at 57 and was prepared to at 55 but was having fun at work at the time so I put it off for two more years. We only dipped below the amount I retired at briefly in the 2008 dip with fairly conservative investments and fairly large cash reserve so I didn't have to sell on dips.
I might have made different decisions if I was single or either of us had serious health problems but with survivor benefits I made the right decision for us.
By the way I retired at 57 and was prepared to at 55 but was having fun at work at the time so I put it off for two more years. We only dipped below the amount I retired at briefly in the 2008 dip with fairly conservative investments and fairly large cash reserve so I didn't have to sell on dips.
haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
It makes sense to follow odds in some situations- mostly when there will be many iterations and where your day to day life cannot be importantly negatively impacted.
In other situations, it is much better to use a fail safe approach.
Ha
Skeptic
Perhaps his reasoning (motive) is to retrain as much assets under his control for as long as he can. Increases his commission.
The only real reason to take SS early is if you think you might not live long, or need the money now and cannot afford to defer. Also, there might be tax reasons to take early.
But most people should defer as long as possible, as a general rule.
Perhaps his reasoning (motive) is to retrain as much assets under his control for as long as he can. Increases his commission.
The only real reason to take SS early is if you think you might not live long, or need the money now and cannot afford to defer. Also, there might be tax reasons to take early.
But most people should defer as long as possible, as a general rule.
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
As pointed out already by others, SS claiming is a many faceted strategy - not just based on longevity or other actuarial issues. In my case, I waited to 70 to pad DW's survival benefit when/if I go first. We had long ago made a conscious choice to reduce her survival benefit with my pension (to increase the early-years benefit). Waiting to 70 for SS was the other side of that decision.
I'm sure we've now discussed here a dozen other facets to SS claiming besides the "living to 90 vs being hit by a bus" scenarios. Pick a strategy based on YOUR situation and live with it. And, as always, YMMV.
I'm sure we've now discussed here a dozen other facets to SS claiming besides the "living to 90 vs being hit by a bus" scenarios. Pick a strategy based on YOUR situation and live with it. And, as always, YMMV.
I understand that if I wait, once I hit 79, I will have get more. My question is, to do what with? What am I going to be spending money on in my 80s? New cars? Trips? More collectibles? How many people at that age are physically and mentally in great condition? So, that leaves what, medical bills and health care? If you have money, the government will take it all at that point anyway. I don't have any heirs or family to leave anything to. So, I'm not saying its not worthwhile to wait until 66.6 put I'm just curious as to what people think they need the extra money for?
daylatedollarshort
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+1. Longevity insurance is not a concern for us but I do like getting the pension and SS checks (one SS so far @ 62) in the bank account every month. I enjoy having those steady income checks and not running down the portfolio as much as other posters might enjoy an extra trip or some home improvements with the higher spend rate they feel they can have by delaying SS to 70 It is like getting paid regularly to not work and it feels great. We don't have a lot in stocks so we also never worry about relying on uncertain market returns to fund our retirement and that feels very freeing to us as well.
To those two, a few more "real" reasons to add to the list:
-no spouse, so survivor benefit doesn't matter
-Desire to preserve as much of other assets as possible for charity or heirs
-Adequate means for a long retirement, and don't want to "leave money on the table"
Those are my considerations at this point, but have a few years to change my mind
I'm in the opposite boat as the OP, my dad died at 63 and both of my grandfathers only lived into their early 70's. So I'm on the fence, will at least wait till 65 when I qualify for medicare. Could wait for my "full" retirement age of 66.33 (what exactly is full about that?). No way I'm waiting for 70. Fortunately, I've got a small pension from one employer that will make up the difference & I've got solid 401k, IRA and brokerage account balances. So it's really just trying to pick the optimum age to maximize my total SS draw & I won't know how well I've done till I'm dead.
I think you need to call up that adviser and make sure you understood him correctly. Assuming you did, fire him.
Here's something else to think about. If you have a lot of money saved up, live off your tax-deferred stash while waiting for SS at 70. Between your retirement date and age 70, you can control how much you withdraw AND you'll reduce your RMDs, possibly reducing your taxable income later in life.
Here's something else to think about. If you have a lot of money saved up, live off your tax-deferred stash while waiting for SS at 70. Between your retirement date and age 70, you can control how much you withdraw AND you'll reduce your RMDs, possibly reducing your taxable income later in life.
arch57
Recycles dryer sheets
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Very easy to model in Excel
A simple model in Excel can show you what the "break-even" point is. Get your SS monthly benefits at 62, retirement age (66.5 for me) and 70. Create columns for your age, year, and the 3 collection amounts. In the rows start with annual amount at 62, then at retirement age, then 70. Sum them (i.e. add amount at age 62 to 63, then that amount to 64, etc.) and take it out to say 90 years old. My break even point delaying until 70 is 81 (in other words I collect as much in 11 years starting at 70 than I do starting reduced benefits at 62).
However, even though at 91 I will have collected $200,000 more (if I make it that long) I am being realistic about my ability to spend the extra $20K/year when I'm in my 80's. My view is that the 8 years from 62-70 are going to continue to be active and I will have the energy and desire to travel, remodel the house, etc. so I would rather put those funds to use while I can best enjoy them.
A simple model in Excel can show you what the "break-even" point is. Get your SS monthly benefits at 62, retirement age (66.5 for me) and 70. Create columns for your age, year, and the 3 collection amounts. In the rows start with annual amount at 62, then at retirement age, then 70. Sum them (i.e. add amount at age 62 to 63, then that amount to 64, etc.) and take it out to say 90 years old. My break even point delaying until 70 is 81 (in other words I collect as much in 11 years starting at 70 than I do starting reduced benefits at 62).
However, even though at 91 I will have collected $200,000 more (if I make it that long) I am being realistic about my ability to spend the extra $20K/year when I'm in my 80's. My view is that the 8 years from 62-70 are going to continue to be active and I will have the energy and desire to travel, remodel the house, etc. so I would rather put those funds to use while I can best enjoy them.
62 For Me
I retired at 62 1/2 ish and rejoice every day that I am not working for a living anymore. That was my possibility. I believe that between finances and the time that a person perceives he/she will live make everyone's decision on when to retire somewhat unique. Personally, as I look back, I wish that I would have retired the day I turned 62. I am having way too much fun for one person. Cheers!
I retired at 62 1/2 ish and rejoice every day that I am not working for a living anymore. That was my possibility. I believe that between finances and the time that a person perceives he/she will live make everyone's decision on when to retire somewhat unique. Personally, as I look back, I wish that I would have retired the day I turned 62. I am having way too much fun for one person. Cheers!
I don't plan on changing my spending by amping up once I start collecting SS at age 70. I have a desired income level that is steady and will be met by different income streams over the years - first my pension and 401k, later adding SS which will decrease my withdrawals from 401k. But by drawing down my 401k early on I'll be reducing my RMDs. I plan to spend more on travel early on and then later on healthcare.
NoOneGetsIt
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In the overall scope of things I don’t think it really effects much. Sure if you take it at 62 it’s a lower payment, but the break even point is a long ways out. Usually around age 82. Feeling lucky
I say there are many “fun advantages to taking early”. Perhaps you have a job you are miserable in, perhaps you are financially comfortable...take it and have fun. It’s the sure thing. So what if you wait and your monthly check is a few hundred higher? You probably won’t be in condition to have fun with it anyway.
I know way to many who told me they were waiting to get the bigger check who skimped and croaked not long after starting it. Ugh, always thought what a shame.
I like this thought process.....I retired early mainly because I saw my mom die at 57 of cancer never getting to retire....take it and live a little is my plan!
